Chapter 11: Real Estate Contracts. Key Terms Part 2 Flashcards Preview

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Flashcards in Chapter 11: Real Estate Contracts. Key Terms Part 2 Deck (15):
1

Liquidated damages

The sum agreed on to serve as damages in case of future default.

2

Novation

Substitution of a new contract for an existing one.

3

Offer and acceptance

Considered a "meeting of the minds"

4

Option

A contract binding one party, other party is for you to act up on this offer or not. Example: lease with the option to buy.

5

Parole evidence rule

The convention that a written contract overrides spoken promises.

6

Recission

A return to the status quo. In contract law, rescission has been defined as the unmaking of a contract between parties. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the status quo ante).

7

Specific performance

A court action usually asking that the seller forced to sell as agreed.

8

Statute of frauds

A law requiring certain contracts to be in writing.

9

Statute of limitations

A law on time limit after which one cannot assert a legal right. A woman of time in which one can sue.

10

Time is of the essence

A contract clause requiring punctional performance.

11

Unenforceable contract

A seemingly valid contract but neither party can sue to force the performance.

12

Unilateral contract

A one sided promise, valid only if the other party acts. I will do this if you do that. For example the police offer a reward for information that leads to the capture of a suspect.

13

Valid contract

A contract that meets all legal requirements.

14

Void contract

A contract that does not meet all legal requirements.

15

Voidable contract

A contract that is binding, but one party may disaffirm it. A minor enters into a contract. However if this minor is married then the contract is not a "voidable contract" and will be treated under normal contract.