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Fundamentals of Real Estate > Unit 6: Contract Law > Flashcards

Unit 6: Contract Law Flashcards

(73 cards)

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1
Q

What are the 3 sources of law in Canada?

A

1) Statute Law (municipal, provincial, federal)
2) Case Law (court interprets legislation)
3) Common Law (historical results become body of law)

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2
Q

There are 3 types of estates in land:

A

1) Fee Simple
2) Leasehold
3) Life Interest

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3
Q

The most common type of real estate and considered the absolute owner of the land applies to _________

A

Fee Simple

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4
Q

In Leasehold, the owner of the land is the _________ and the other party is known as the _______

A

Lessor and Tenant / Lessee

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5
Q

In _________ the tenant has an interest in the land for the duration of their lifetime.

A

Life Estate

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6
Q

___________ in Alberta confers a life interest to a spouse who has lived in the property during the marriage, but who is not listed on the title as owner.

A

The Dower Act

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7
Q

Dower Act only applies to income properties if…

A

at least one of the spouses has resided on the property at some point during marriage

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8
Q

3 Questions to confirm Dower Rights:

A

1) Is the owner the only name on the title?
2) Is the owner married?
3) Has either spouse lived there during marriage?

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9
Q

________________ requires that certain contracts be in writing and that those contracts be signed by all parties bound by it.

A

Statute of Frauds

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10
Q

Which contracts apply to a Statute of Frauds in Alberta?

A
  • Sale / transfer of land
  • Answering for a debt or duty of another
  • Contracts not able to be completed within 1 year
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11
Q

2 Methods to creating contracts

A

1) Express Contract
2) Implied Contract

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12
Q

Is an implied contract legally enforceable?

A

Yes

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13
Q

Depending on the relationship between parties to a contract it is considered either…

A

Bilateral (exchange or mutual promises) or Unilateral (one person makes an obligation)

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14
Q

A contract may be classified as either __________ or ____________ depending on whether the obligation(s) have been fulfilled by all parties

A

Executory or Executed

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15
Q

Essential elements of a contract include:

A
  • parties have legal capacity
  • object of contract is lawful
  • intent to enter into a contract
  • consideration of promises
  • both parties must agree
  • parties must have all facts and free will
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16
Q

Real Estate agents should consider the following capacity issues when signing contracts:

A
  • Intoxication / substance Impairment
  • Incompetence (mental disease)
  • Age
  • Language
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17
Q

Consideration in the contract must be of monetary value?

A

No

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18
Q

Mistakes in understanding can happen 3 ways:

A

1) Common mistake (everyone has same mistake)
2) Mutual mistake (each party mistaken, but different mistakes)
3) Unilateral Mistake (one party makes mistake but other doesn’t correct them)

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19
Q

Validity of Contracts can be broken down into…

A
  • Valid
  • Void (1+ essential elements missing)
  • Voidable (one party challenges validity)
  • Illegal
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20
Q

_______ may be included by any party but must have a specified period after which it expires.

A

Conditions

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21
Q

_____________ means the party would need to waive or remove conditions before the timeline expires in order for it to proceed

A

Conditions Precedent

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22
Q

__________ means the condition is presumed to be met by the deadline if no notice is provided otherwise.

A

Conditions Subsequent

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23
Q

In Alberta, we use conditions _______ for real estate purchase contracts.

A

Precedent

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24
Q

_________ are the essential details of the contract and represent the points of agreement.

A

Terms

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25
Does specific work to be done by one party before the contract is accepted, an example of a term or condition? (e.g. seller to replace broken window)
Term
26
Only the original parties to a particular contract can enforce and be bound by that contract, refers to...
Privity of Contract
27
5 Ways to terminate a contract:
1) Performance (completion) 2) Mutual Agreement 3) Frustration (e.g. act of god) 4) Operation of Law (failure to renew license, bankruptcy) 5) Breach (one fails to fulfill)
28
Breaches can arise in 3 ways:
1) One party says they will not perform duties on time 2) One party makes it impossible to perform 3) Failure to perform on time
29
Breach of Contract may result in...
- Monetary Damages - Quantum Meruit - Specific Performance - Injunction
30
________ is when part but not all of the promises were kept, the injured is entitled to the reasonable value outstanding.
Quantum Meruit
31
_____________ when found guilty, they are required to carry out their promise
Specific Performance
32
____________ where the promise was to refrain from doing something, the court can stop them from doing the act
Injunction
33
The 5 Ps of the Real Estate Purchase Contract are:
1) Property (described properly) 2) Parties (names of sellers/buyers) 3) Price 4) Payment 5) Possession Date
34
Commercial tenancies are governed by the ____________ and the ________ between landlord and tenant.
Common Law and Lease Agreement
35
Residential tenancies are governed by the _______ and the ___________ and apply to dwelling units
Common law and statute law
36
A written lease of ___ years or more may be registered on the property title
3 years
37
Lease forms must include the following for them to be legally enforceable (7):
- Correct names and signatures - Legal description of premises - Contract that includes exchange of values (e.g. rent for money) - Purpose of premises use - Commencement / expiration dates - Details of renewal privileges - Rules, regulations, policies, etc.
38
Contracts under seal may occur in the following instances (3):
1) Transfer of deceased person' property per will 2) Individual wins property in a game of chance 3) Valid Power of Attorney enters transaction
39
________ are supplementary forms included with a contract to provide relevant additional details about a property.
Appendices
40
What are some examples of schedules (5):
1) Source of buyer's financing 2) Info about a condo unit 3) Property inspection condition 4) Need for buyer to sell existing property before purchase of new one 5) Terms between buyer and builder for constructing a new property
41
__________ are documents attached to and made part of the original contract.
Addenda
42
_________ is used when it's necessary to change any aspect of previously agreed-to terms or add / remove info inside or attached to a contract.
Amendment
43
________ is a written signed, dated, and witnessed document that enables an individual to appoint another person to act on his or her behalf with respect to their financial / legal affairs (including debt)
Power of Attorney (POA)
44
What are the 4 types of Power of Attorney?
1) General Power of Attorney 2) Special Power of Attorney 3) Immediate Power of Attorney 4) Enduring Power of Attorney
45
Decisions covered by General Power of Attorney include (5):
- Banking - Investments - Paying Bills - Filing Income Tax Returns - Handling Gov't benefits
46
In Alberta, POA that specifies land is treated as a ___________ and has the effect of suspending the owner's right to deal with the land.
Special Power of Attorney They will be listed on the title
47
______ is a court-appointed individual for a represented adult.
Guardian
48
_______ is a person who has been appointed by way of a legal agreement to hold such assets as cash, investments, or real property for the benefit of the beneficiary.
Trustee (can be an individual or corporation)
49
When a trustee or guardian has been appointed, agents must obtain...
a copy of the legal document granting them power and verify who the representative is and what legal authority they have been granted.
50
Do trustees or guardians have the authority to manage or make decisions about the purchase or sale of real estate?
Only trustees (if their name is on the title)
51
___________ is a person appointed in a Will to administer and distribute the estate of a deceased individual
Executor
52
An ____________ is a legal sales transaction where by the original buyer (_________) of the property sells and transfers their interest / obligations under the original contract to the new buyer (______________).
Assignment, Assignor, Assignee
53
As a legal entity, a _________ has all the rights, powers, and privileges of a person. As such they can enter contracts with property like a person can, unless restrictions are noted in its Article of Incorporation
Corporation
54
A ____________ is the sale of property that is conducted under supervision of the Court of the King's Bench.
Judicial Sale (e.g. foreclosure)
55
In Alberta, the _____________ was created to ensure that electronic records and transactions have the same validity as paper transactions.
Electronic Transactions Act
56
The property info that must be included in the purchase contract includes (2):
- Municipal Address - Legal Description
57
__________ are unattached or attached goods that are staying with the property
Inclusions
58
_____________ attached goods that are being removed by the seller or are encumbered (leased, rent to own items, installment plan, or under loan) items, unattached items the buyer wants removed, etc.
Exclusions
59
Titles will be free and clear of all encumbrances and obligations except (4):
- Items implied by law - Easements, utility ROW, covenants - HOA caveats, encumbrances or regulations - Any other items the buyer agrees to assume in contract (e.g. condo stalls, storage)
60
_____________ is the recipient of any interest earned on deposits (but must be specified in purchase contract)
The Buyer
61
Real estate transactions typically close at ___________ on the ______________ and the seller is responsible for the property up to and including that date
noon, completion date / possession date
62
The seller's lawyer will use the funds from the purchase to pay out all.....
mortgages, registrations and other financial obligations of the buyer
63
Who is responsible for paying the closing costs?
Both the seller and buyer pay their own
64
__________ protect the party who added it to the purchase contract and serves as an impediment tot he sale until it is removed or waived.
Conditions
65
Common Buyers conditions on contracts include (5):
- Financing - Property Inspection - Condo doc review - Relocation (to be approved by employer of buyer) - Sale of Buyer's home
66
Common Sellers conditions on contracts include:
- Relocation (to be approved by employer of seller) - Seller purchase (buying a new home to move to) - Lawyer review - Dower condition
67
What are the 4 potential outcomes for Conditions in the purchase contract?
1) Expiry (date they must be removed) 2) Removal (waived) 3) Non-removal 4) Extension
68
The seller's remedies to an incomplete purchase are (2):
- Keeping the buyer's deposit - Claiming additional damages
69
The buyer's remedies to an incomplete purchase are (1):
- Claiming specific specific performance from the seller (also can claim legal fees or other costs)
70
If an offer has the words declined or rejected written on it...
the buyer cannot resubmit or update their offer but must write an entirely new one
71
___________ refers to the gathering and processing of all relevant transaction documents in preparation for them to be sent to the respective lawyers.
Conveyancing
72
Which doctrines of law relate to land ownership in Canada (2):
1) Doctrine of Tenure 2) Doctrine of Estates
73

Fundamentals of Real Estate (19 decks)

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