Chapter 12 - Contracts and Contract Preparation Flashcards Preview

NYREI > Chapter 12 - Contracts and Contract Preparation > Flashcards

Flashcards in Chapter 12 - Contracts and Contract Preparation Deck (29)
1

As Is

Provision in purchase agreement where buyer accepts property in present condition without requiring seller to fix any problems or renegotiating if a problem is found.

2

Assignment

One party in contract transfers rights/interest in contract to new party - original party still secondarily liable.

3

Bilateral / Unilateral

Unilateral contract is where one party makes a binding promise to the other, bilateral both parties make binding promises to the other

4

Consideration

Anything of value given to induce another to enter into contract.

5

Contingency

AKA conditions - contract provisions that make rights or obligations dependent on the occurrence (or non-occurrence) of certain events.

6

Contract

Agreement between two or more parties to do something.

7

Earnest Money Deposit

Deposit accompanies an offer and conveys seriousness of buyer. If buyer doesn't follow through with their purchase, seller keeps the deposit.

8

Executed / Executory

Executory is where one or both parties have yet to fulfill their agreement, executed is once both have fully perform their contractual obligations

9

Express / Implied Contract

Express is an agreement expressed in words (written or verbal), implied is not expressed in words but implied by actions

10

Forbearance

Legally binding promise to refrain from doing a certain act.

11

Land Contract

Installment sales contracts. Vendee makes payments to vendor in exchange for right to occupy and use property, but deed and title do not transfer until all or specified portion of payment is made.

12

Liquidated Damages

Amount of money specified in contract to be awarded in event of a contract breach - lessens chance of expensive litigation.

13

Meeting of the Minds

Acceptance of the terms of an offer so that a contract can be formed.

14

Novation

Substitution of a new contract for an earlier one

15

Offer / Counteroffer

Offer is made by buyer and seller may counteroffer with a compromised price or terms.

16

Option

Unilateral contract giving one party the right to do something without requiring them to do so. EX: lease with option to purchase.

17

Power of Attorney

Authorizes one person to act as another's agent.

18

Proprietary Lease

Longer terms than ordinary leases with more rights. Used in co-ops, title is held in corporation and buyers purchase shares in corporation vs. real property.

19

Rescission

Destruction or termination of contract where all parties must give back anything acquired under it.

20

Rider

Amendments to contracts.

21

Right of First Refusal

Right to have first chance to buy or lease property if owner sells or leases. EX: co-ops

22

Sales Contract

Seller promises to convey title to real property to a buyer in exchange for purchase price.

23

Specific Performance

Legal remedy to breach of contract where court orders the breacher to perform as agreed rather than pay damage.

24

Statute of Frauds

Law requiring certain types of contracts to be in writing and signed in order to be enforceable.

25

Statute of Limitations

6 years - time limit to bring legal action to matters regarding real estate contracts

26

Time is of the Essence

Emphasizes timely performance as an essential part of a contract - failure to perform is a material breach.

27

Void / Voidable

Void is where an contract lacks one or more essential elements for contract formation (like an owner's signature on a listing agreement to sell a house). Voidable is where one party can end a contract without liability because of lack of legal capacity, fraud, or duress (party is a minor).

28

Material breach

Breach of contract important enough to excuse the other party from any contractual obligations

29

Substantial performance

Promisor doesn't meet all contractual obligations but does enough so that promisee is required to fulfill obligations - but they may sue for damages for unfulfilled details.