Flashcards in Chapter 12 - Contracts and Contract Preparation Deck (29)
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.
One party in contract transfers rights/interest in contract to new party - original party still secondarily liable.
Bilateral / Unilateral
Unilateral contract is where one party makes a binding promise to the other, bilateral both parties make binding promises to the other
Anything of value given to induce another to enter into contract.
AKA conditions - contract provisions that make rights or obligations dependent on the occurrence (or non-occurrence) of certain events.
Agreement between two or more parties to do something.
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.
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
Express / Implied Contract
Express is an agreement expressed in words (written or verbal), implied is not expressed in words but implied by actions
Legally binding promise to refrain from doing a certain act.
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.
Amount of money specified in contract to be awarded in event of a contract breach - lessens chance of expensive litigation.
Meeting of the Minds
Acceptance of the terms of an offer so that a contract can be formed.
Substitution of a new contract for an earlier one
Offer / Counteroffer
Offer is made by buyer and seller may counteroffer with a compromised price or terms.
Unilateral contract giving one party the right to do something without requiring them to do so. EX: lease with option to purchase.
Power of Attorney
Authorizes one person to act as another's agent.
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.
Destruction or termination of contract where all parties must give back anything acquired under it.
Amendments to contracts.
Right of First Refusal
Right to have first chance to buy or lease property if owner sells or leases. EX: co-ops
Seller promises to convey title to real property to a buyer in exchange for purchase price.
Legal remedy to breach of contract where court orders the breacher to perform as agreed rather than pay damage.
Statute of Frauds
Law requiring certain types of contracts to be in writing and signed in order to be enforceable.
Statute of Limitations
6 years - time limit to bring legal action to matters regarding real estate contracts
Time is of the Essence
Emphasizes timely performance as an essential part of a contract - failure to perform is a material breach.
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).
Breach of contract important enough to excuse the other party from any contractual obligations