Chapter 9 "Real Estate Contracts"

Question 1

Express Contract

Answer 1

Parties state the terms and show their intentions in words. May be oral or written. i.e. listing agreements and buyer representation agreements

Question 2

Implied Contract

Answer 2

The agreement of the parties is demonstrated by their acts and conduct.

Question 3

Bilateral Contract

Answer 3

both parties (seller and buyer) promise to do something:; one promise is given in exchange for another.

Question 4

Unilateral Contract

Answer 4

one-sided agreement whereby one party makes a promise in order to induce a second party to do something.

Question 5

Executory Contract

Answer 5

exists when something remains to be done by one or both parties; that is, the agreement is partially performed. i.e. the contract can be signed by both partied but the payment has not been delivered yet.

Question 6

Executed Contract

Answer 6

When all parties have fulfilled all promises in the agreement. Once funding and closing has occurred, the real estate sales contract is an executed agreement - the purchase price is paid, the deed is delivered, and the purchaser has possession of the property.

Question 7

Valid Contract

Answer 7

Binding and enforceable on both parties

Question 8

Void Contract

Answer 8

No legal effect; Contract for an illegal purpose.

Question 9

Voidable Contract

Answer 9

Valid, but may be disaffirmed by one party; Contract with a minor.

Question 10

Unenforceable Contract

Answer 10

Valid between parties, but neither may force performance; Certain oral agreements.

Question 11

Consideration

Answer 11

Mutual exchange of promises by buyer and seller to legally obligate themselves to do something they were not legally required to do before.

Question 12

Statute of Limititaions

Answer 12

Any action for the specific performance of a contract for the conveyance of real property must be commenced within 4 years from the date of the breach. A suit brought for a DTPA violation must be begun within 2 years from the date a buyer could reasonably have discovered the deceptive act. A party who intends to file a claim for payment from the real estate recovery fund must file an action within 2 years from the date a cause of action accrues.

Question 13

Assignment

Answer 13

refers to a transfer of rights, duties, or both under a contract. Substitution of parties.

Question 14

Novation

Answer 14

or the substitution of a new contract for an existing agreement with the intent of extinguishing the old contract, is another way to perform a contract.

Question 15

Option Agreement

Answer 15

Unilateral contract by which an optionor (generally an owner) gives an optionee (a prospective purchaser or lessee) the right to buy or lease the owner”s property at a fixed price within a stated period of time. Is not a sales contract.

Question 16

Contract for Deed

Answer 16

the buyer (called the vendee) agrees to give the seller a down payment and pay regular monthly installments of principle and interest over a number of years.