Unit 11

Question 1

Contract

Answer 1

Voluntary
Agreement or promise
Between legally competent parties
supported by legal consideration
to perform some legal act

OFFER, ACCEPTANCE, CONSIDERATION

Question 2

Express

Answer 2

State the term and show intentions in words, oral or written

contracts for real property must be in writing to be enforceable in court

Question 3

Implied

Answer 3

Agreement demonstrated by acts and conduct

Question 4

Bilateral

Answer 4

both parties promise to do something; real estate sales contract

Question 5

unilateral

Answer 5

one sided; exclusive listing contract; option contract

Question 6

option contract

Answer 6

where a party retains option to enforce contract at a later date

Question 7

executed

Answer 7

all parties have fulfilled their promise; at closing sales contract is executed

Question 8

executory

Answer 8

exists when one or both parties still have an act to perform; sales contract once signed until closed

Question 9

Elements of Valid Contract

Answer 9

offer and acceptance (mutual assent) - meeting of the minds

any offer or counter may be withdrawn at any time before it has been accepted

Question 10

Acceptance

Answer 10

if signed, the offer is accepted and contract is formed

Question 11

Offers

Answer 11

Can be terminated by a counter or rejection

Question 12

Consideration

Answer 12

give something of legal value, parties agree and no undue influence or fraud

Question 13

Legal purpose

Answer 13

legal purpose or void

Question 14

Validity of Contracts

VALID

Answer 14

meets all the essential elements that make it legally sufficient or enforceable

Question 15

void

Answer 15

no legal effect because it lacks some of essential elements

Question 16

void

Answer 16

no legal effect because it lacks one or more of the essential elements; was never valid

Question 17

unenforceable

Answer 17

Can’t sue each other

ex - not in writing

Question 18

performance

Answer 18

perform certain rights and duties usually within a specified time

Question 19

performance

Answer 19

perform certain rights and duties usually within a specified time; once fulfilled the contract is terminated

Question 20

assignment

Answer 20

transfer of rights or duties

ex elderly person assigns handling of contract to someone

Question 21

novation

Answer 21

substitution of new contract for existing one

ex. writing new contract accepted by all parties

Question 22

breach of contract

Answer 22

violation of any of the terms or conditions without legal excuse

Question 23

breach of contract

Answer 23

violation of any of the terms or conditions without legal excuse; or failing to fulfill duties and obligations under the contract

Question 24

Statute of Limitations

Answer 24

time limit in which rights may be enforced
oral - 5 years
written 10 years

Question 25

Delivery of signed contract

Answer 25

within 24 hours

Question 26

Ripening of Contract

Answer 26

when doc is signed by seller, it becomes contract of sale

Question 27

Earnest $

Answer 27

discharge buyer from defaulting help seller feel comfortable taking property off the market cover any expenses the seller might incur if buyer defaults

Question 28

Earnest $

Answer 28

discourage buyer from defaulting deposited by next business day into separate account records keep for min of 5 years help seller feel comfortable taking property off the market cover any expenses the seller might incur if buyer defaults

Question 29

equitable title

Answer 29

interest buyer has in land after contract is signed

Question 30

destruction of the premises

Answer 30

seller responsible until title transfers and has to return earnest $

Question 31

liquidated damages

Answer 31

when parties agree on certain amount of $ that will compensate nonbreaching party

Question 32

Contingencies

Answer 32

make it a voidable contract - specific actions - time frame - who pays any costs involved Types of Contingencies - mortgage - inspection - property sale

Question 33

Contingencies - buyer can get out of contract without breaching the contract

Answer 33

make it a voidable contract - specific actions - time frame - who pays any costs involved Types of Contingencies - mortgage - inspection - property sale

Question 34

amendment

Answer 34

change to existing contract

Question 35

addendum

Answer 35

new contract that includes provisions in original contract "by reference"

Question 36

option

Answer 36

owner gives prospective buyer option to buy at fixed price within a certain period of time

Question 37

option agreement

Answer 37

is UNILATERAL | pay consideration and can be renewed usually with additional consideration

Question 38

option agreement

Answer 38

is UNILATERAL | pay consideration and can be renewed usually with additional consideration

Question 39

Land Contract/Installment contracts/Seller Financing

Answer 39

seller retains legal title, buyer takes possession and equitable title. Make installment payments, taxes, insurance, repairs and upkeep

Question 40

Land Contract is Void if:

Answer 40

forbids buyer to record contract provides recording does not constitute notice any penalty for recording