***Ch 14. Real estate contracts***

Question 1

A contract in which both parties enter into mutual promises

• cannot sue for breaking a promise of a gift
• sale and purchase contract

Answer 1

Bilateral Contract

Question 2

Having the mental and age capacity to enter into a contract

Answer 2

Competent

Question 3

An agreement between two or more competent parties, supported by consideration, to do, or not to do, a certain legal act

Answer 3

Contract

Question 4

Listing agreement whereby the seller may find a buyer without owing a commission, although the seller agrees not to list the property with any additional brokers

Answer 4

Exclusive Agency Listing

Question 5

Listing agreement whereby the broker earns a commission no matter who procures the buyer

Answer 5

Exclusive Right of Sale

Question 6

A specific dollar amount of damages to be paid by a breaching party as specified in the contract

Answer 6

Liquidated Damages

Question 7

An agreement and understanding between the parties concerning the intent of their contractual terms

Answer 7

Meeting of the Minds

Question 8

A listing agreement whereby the broker keeps any funds over a definite net amount to be received by the seller

*legal in florida

Answer 8

Net Listing

Question 9

Substitution of a contract and a party for another contract and another party

*seller agrees to only sue the second buyer if they ever go to court

Answer 9

Novation

Question 10

Listing agreement whereby the seller promises to pay a broker a commission if that broker procures a buyer. The seller may sell the property itself without owing a commission, and the seller may enter an open listing with several different brokers simultaneously.

Answer 10

Open Listing

Question 11

unilateral agreement, must be in writing, one party agrees not to sell the property to anyone else even though the opposite party is under no obligation to purchase the property

Answer 11

Option Contract

Question 12

Body of law that states that certain types of contracts must be in writing to be enforceable

Answer 12

Statute of Frauds

Question 13

Establishes time limits for filing litigation

Answer 13

Statute of Limitations

Question 14

contract is one that has not met the requirements of the statute of frauds or has gone beyond the legal time limit provided by the statute of limitations.

Answer 14

Unenforceable contract

Question 15

A contract whereby only one party undertakes a promise or obligation

*option contract

Answer 15

Unilateral Contract

Question 16

When a contract satisfies all legal requirements

*does not have to be in writing

Answer 16

Valid

Question 17

A contract the law will not recognize under any circumstances

Answer 17

Void

Question 18

Contract involving a minor or other incompetent party wherein the incompetent part has a choice to enforce or rescind the contract

Answer 18

Voidable

Question 19

What are the 3 types of contracts real estate licensees are permitted to prepare?

Answer 19

Sale and purchase
Listing Agreement
Option Contract

Question 20

The contract between a buyer and a seller of real property

*has to be in writing to be valid

Answer 20

Sale and purchase

Question 21

An employment agreement between a broker and a seller (principal) to perform a real estate service

Answer 21

Listing Agreement

Question 22

A contract in which a potential seller gives an OPTION to a potential buyer granting the right to purchase property upon terms and conditions stated in the option

Answer 22

Option Contract

Question 23

Examples of types of contracts that must be in writing in order to be enforceable are

Answer 23

Sale and Purchase Contracts

Option Contracts

Leases for more than one year

Question 24

What are the exceptions where statue of frauds does not apply

Answer 24

Partial performance doctrine

Full performance doctrine

Question 25

In a Sale and Purchase Contract, if the Buyer has paid part of the purchase price to the Seller, and has either (1) taken possession of the premises, or (2) commenced repairs or improvements

Answer 25

Partial performance doctrine

Question 26

in a Sale and Purchase Contract, if the parties go to closing, the purchase price is paid and title is conveyed to the Buyer,then the Statute of Frauds does not apply and cannot be raised as a defense after the sale.

Answer 26

full performance doctrine

Question 27

What is the oral and written time periods for statue of limitations

Answer 27

oral 4 yrs | written 5yrs

Question 28

what are the 4 essential elements to a contract

Answer 28

Contractual capacity of the parties (competency) Offer and Acceptance (meeting of the minds) Legality of Object Consideration

Question 29

a beneficial interest in real estate that implies legal title at a later date (under contract but doesn't own yet)

Answer 29

Equitable title

Question 30

exists when a party owns real estate

Answer 30

Actual title

Question 31

exists when all of the details are understood by the parties, whether oral or in writing

Answer 31

expressed contract

Question 32

exists when some of the terms and conditions are not stated but rather are inferred by the nature of the transaction or the conduct of the parties

Answer 32

implied contract

Question 33

Anytime there is something remaining to be done under a contract, its status is considered to be

Answer 33

executory

Question 34

one in which all the terms and conditions agreed upon have been completed

Answer 34

executed contract

Question 35

7 ways to terminate and offer

Answer 35

``` Acceptance Withdrawal Rejection Counteroffer Lapse of time Destruction of subject Death or Insanity ```

Question 36

4 ways to terminate a contract

Answer 36

Performance Mutual Rescission Destruction of subject Breach

Question 37

After a breach of contract If a party does not want money damages, they have the option to seek what through judicial proceedings

Answer 37

Specific Performance

Question 38

transferring legal rights under a contract *this does not receive the person that transferred of any responsibility in the contract

Answer 38

Assignment of contract

Question 39

The contract between a seller of real property and the broker *can be oral or written

Answer 39

Listing Agreement

Question 40

a copy of the listing contract (if written) must be furnished to the principal within how many hours after the written agreement is obtained.

Answer 40

24 hrs

Question 41

A licensee is considered to be the what of the sale when they have set into motion events that were ultimately responsible for the formation of a contract.

Answer 41

Procuring cause

Question 42

Federal law requires a disclosure about lead based paint if the subject property was built before what year

Answer 42

1978

Question 43

Failure to timely provide the homeowner’s association disclosure will give the buyer a how many business days right of rescission that will begin once the disclosure is provided.

Answer 43

3 BUSINESS days

Question 44

in an optional contract in order for there to be a binding contractual agreement, the Optionee is required to give what, which is considered to be more than a promise, and is often in the form of money.

Answer 44

valuable consideration

Question 45

A seller can sell property in what condition. But, if the seller is aware of any material defects, those defects must be disclosed.

Answer 45

As is

Question 46

Sellers of real estate are required to disclose all known property defects that are not openly visible to potential buyers as soon as possible because of what court case?

Answer 46

Johnson v. Davis the seller was found guilty of concealing defects and the Court rescinded the sales contract