Chapter 11: Real Estate Contracts Flashcards Preview

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Flashcards in Chapter 11: Real Estate Contracts Deck (70):
1

Exist when the party states the terms and show their intentions in words. This maybe oral or written

Express contract

2

Certain types of contracts must be in writing to be enforceable in a court of law

Statute of fraud

3

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

Implied contract

4

Both parties promise to do something; one promises given in exchange for another. An example is a real estate sales contract

Bilateral contract

5

A one sided agreement

Unilateral contract

6

A contract in which all parties have for filled their promises: the contract has been performed

Executed contract

7

Exist when one or both parties still have an act to perform a sales contract is an example

Executory contract

8

What are the five elements of a contract

Offer and acceptance

Consideration

Legally competent parties

Consent

Legal purpose

9

What must be in writing. The wording of the contract must express all the agreed on terms and must be clearly understood by the parties

Offer and acceptance

10

A new offer; it voids the original offer

Counter offer

11

Something of legal value offered by one party and excepted by another as an inducement to perform or to refrain from performing some act

Consideration

12

Has all legal elements and is fully enforceable what kind of contract is this?

Valid contract

13

A contract that lacks all or one legal elements

Void contract

14

A contract that has all legal elements and maybe rescinded or disaffirm

A voidable contract

15

A contract that has all legal elements and is enforceable only between the parties

Unenforceable contract

16

A transfer of rights or duties under a contract

Assignment

17

Substitution of the new contract for an existing contract

Novation

18

A violation of any of the terms or conditions of the contract without legal excuse

Breach of contract

19

How soon is a licensee give each person signing or initialing the contract and original "true copy" within the time of signing

24 hours

20

Legal title transfers only on delivery and acceptance of the deed. After both buyer and seller have executed sales contract, the buyer requires an interest in the land

Equitable title

21

What specifically states that the seller Bears any loss that occurs before the title passes or the buyer takes possession

Uniform vendor and purchaser risk act

22

Additional conditions that must be satisfied before a sales contract is fully enforceable

Contingencies

23

A change to an existing contract

Amendment

24

Any provision added to an existing contract without altering the content of the original this must be signed by both parties

Addendum

25

Contract by which an option or gives an optionee the right to buy or lease the owners property at a fixed price within a certain time period. The optionee pays a fee for this option right. This is only enforceable by the optionee

An option contract

26

Contract for deed

Land contract

27

Articles of agreement for warranty deed

Installment contract

28

The seller retains legal title under what typical contract

Land contract

29

A voluntary agreement or promise between legally competent parties, supported by legal consideration, to perform some legal act

Contract

30

A void contract is one that?

Not legally enforceable

31

The legal proceeding or legal action brought by either the buyer or seller under a purchase contract to enforce the terms of the contract is known as?

A suit for specific performance

32

The essential elements of a contract include all of the following..

Offer and acceptance
Competent parties
Consideration

33

If upon the receipt of an offer to purchase his property under certain conditions the seller makes a counteroffer the prospective buyer is?

Relieved of his original offer

34

The amount of earnest money deposit is determined by?

An agreement between the parties

35

A buyer defaulted some time ago on a written contract to purchase a sellers real estate. Can the seller sue for damages?

Yes, if the seller is not prohibited from doing so by the statue of limitations

36

A written real estate contract is assumed to be the complete agreement of the parties because of the?

Parol evidence rule

37

What gives the best evidence of the buyers intention to carry out the terms of the real estate purchase contract?

The earnest money

38

The term rescind means to?

Cancel

39

What is essential to the formation of a contract?

Offer
Acceptance
Consideration

40

An option?

Keeps an offer open for a specified time

41

When a prospective buyer makes a written purchase that the seller accepts then the?

Buyer receives equitable title to the property

42

A buyer Agrees to purchase the sellers house for $230,000 and deposit $6900 in earnest money with the sellers broker. However the seller is unable to clear the title to the property and the buyer demands the return of the earnest money as provided in the purchase contract. The sellers broker should?

Return the entire amount to the buyer

43

A bilateral contract is one in which?

The promise of one party is given in exchange for the promise of the other party

44

A buyer makes an earnest money deposit of $1500 on a $15,000 property and then withdraw the offer before the seller can accept it. The brokers responsible for disposing of the earnest money by?

Returning the $1,500 to the buyer

45

A broker rights to present a purchase offer to the seller, an elderly invalid, and finds her ex-husband also present. In the presence of the broker, the ex-husband persistently urges the seller to accept the offer, even though it is much lower than the price she has been asking for her home. If the seller accepts the offer, she may later claim that?

She was under undue duress from her former husband, and therefore, the contract is void

46

The law that requires real estate contracts to be in writing to be enforceable is the?

Statue of frauds

47

If it owner take the property off the market for a definite period of time in exchange for some consideration, but the owner grants the right to purchase the property with in that period for a stated price, this is called?

Option

48

What would best describe earnest money?

The money put up by the buyer at the time the offer is made

49

Money that serves to compensate a seller in the event a buyer defaults is know as?

Liquidated damages

50

To assign a contract for the sale of real estate means to?

Transfer ones rights under the contract

51

When the seller and the buyer sign a valid purchase contract?

The buyer received equitable title

52

What is essential to a real estate contract?

Offer and acceptance

53

Two sales people working from the same broker obtained to offers on a property listed with their firm. The first offer was obtained early in the day. A second offer for a higher purchase price was obtained later in the afternoon. The broker presented the first offer to the seller that evening. The broker did not inform the seller about the second offer so that the seller can make a decision about the first offer. What is true?

The broker has no authority to withhold any offers from the seller

54

A broker has an exclusive right to sell listing on a building. The owner is out of town when the broker gets an offer from the buyer to purchase the building providing the seller agrees to take a purchase money mortgage. The buyer must have a commitment from the seller before the seller is scheduled to return to the city. Under the circumstances?

Broker must obtain the signature of the seller to effect a contract

55

A broker took a listing in later discovered that the client was legally incompetent and has been living in a mental institution for many years. The listing is now?

Of no value to the broker because it is now void

56

On Monday the seller offers to sell a vacant lot to the buyer for $112,000. On Tuesday, the buyer counter offers to buy for $110,500. On Friday the buyer withdraws the counter offer and accept the original offer of $112,000. Under these conditions?

There is no valid agreement because the buyers counter offer was a rejection of the sellers offer and, once it was rejected, it cannot be accepted later

57

In an option to purchase real estate, the optionee?

Has no obligation to purchase the property

58

The broker receives an earnest money deposit with a written offer to purchase that includes a 10 day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of the earnest money deposit. In this situation?

The buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money

59

At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of the building. In fact, the seller knew that any new construction would very likely sink up to 15 feet below the surface. This contract is?

Voidable by the buyer because of fraud

60

After the buyer and seller has signed a sales contract, the seller has a change of heart and defaults. The buyer sues the seller. Is this a legal action?

Yes, the buyer can sue for specific performance

61

The concept that requires that an injured party bring an action within a specific period of time after the injury is?

The statute of limitations

62

What is correct regarding the acceptance of an offer?

An offer can be rescinded at any time prior to acceptance

63

A contract agreed to under duress is?

Voidable

64

A real estate sales contract becomes valid or in effect when it has been signed by?

The buyer and the seller

65

What would not terminate an offer?

An offer from a third party

66

If a broker deposits the buyers earnest money in a trust account, at what time is the seller entitled to receive it?

At the time of settlement

67

The party to whom an offer is being made ( the offeree) has the right to

Reject the offer

68

What best describes a contract that is voidable?

The contract may be declared void

69

Who would have equitable title to property?

The buyer in a sale contract and the vendee in a land contract

70

What is the status of an option contract that has been exercised?

Bilateral contract