Vocabulary: Chapter 14-Real Estate Contracts Flashcards Preview

Real Estate > Vocabulary: Chapter 14-Real Estate Contracts > Flashcards

Flashcards in Vocabulary: Chapter 14-Real Estate Contracts Deck (30)
Loading flashcards...
1

Addendum

Any provision added to an existing contract without altering the content of the original. Must be SIGNED by all parties

2

Amendment

A change to the existing content of a contract (i.e., if words or provisions are added to or deleted from the body of the contract). Must be INITIALED by all parties

3

Assignment

The transfer in writing of interest in a bond, mortgage, lease, or other instrument. (TRANSFER OF INTEREST)

4

Bilateral Contract

A contract in which a promise is made for another promise. (I promise to pay you if you promise to wash my car)

5

Breach of Contract

Violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due

6

Consideration

(1) That received by the grantor in exchange for his or her deed.
(2) Something of value that induces a person to enter into a contract

7

Contingencies

A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes binding

8

Contract

A voluntary, legally enforceable promise between two competent parties to perform (or not perform) some legal act in exchange for consideration

9

Counteroffer

A new offer made in response to an offer received, It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror

10

Disclosure

Relevant information or facts that are known or should have been known

11

Earnest Money

Money deposited by a buyer under the rems of a contract, to be forfeited if the buyer defaults but to be applied to the purchase price if the sale is closed

12

Equitable title

The interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another's name

13

Executed Contract

A contract in which all parties have fulfilled their promises and thus performed the contract

14

Executory contract

A contract under which something remains to be done by one or more of the parties

15

Implied Contract

A contract under which the agreement of the parties is demonstrated by their acts and conduct

16

Land Contract

(INSTALLMENT CONTRACT) transaction in which the sales price is paid in two or more installments over two or more years, if the sale meets certain requirements, a taxpayer can postpone reporting such income until future years by paying tax each year only on the proceeds received that year

17

Liquidated Damages

An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract

18

Novation

Substituting a NEW (NOVA) obligation for an old one or substituting new parties to an existing obligation

19

Offer and Acceptance

Two essential components of a valid contract; "meeting of the minds"

20

Option

An agreement to keep open for a set period an offer to sell or purchase property (Unilateral Contract!)

21

Rescission

The practice of one party canceling or terminating a contract, which has the effect of returning the parties to their original positions before the contract was made

22

Statute of Frauds

The part of state law that requires certain instruments, such as deeds, real estate sale contracts, and certain leases (MORE THAN 1 YR) to be in writing to be legally enforceable

23

Suit for Specific Performance

If the seller breaches a real estate sales contract, the buyer may sue, asking the court to force the seller to go through with the sale and convey the property as previously agreed

24

"Time is of the essence"

A phrase in a contract that requires the performance of a certain act within a stated period of time

25

Unenforceable contract

A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, an unsigned contract is generally unenforceable

26

Unilateral Contract

A contract in which only one party promises something if the other party takes action (IE "I will pay $500 dollars to whomever finds my cat)

27

Valid Contract

A contract that complies with all the essential of a contract and is binding and enforceable on all parties to it.

28

Void Contract

A contract that has no legal force or effect because it does not meet the essential elements of a contract (Example: a contract to do an illegal act, murder)

29

Voidable Contract

A contract that seems to be valid on the surace but may be rejected or disaffirmed by one or both of the parties. (Usually by one party)

30

Essentials of Valid Contract

1)Legally Competent parties
2) Voluntary
3)Consideration
4)Legal Act
5)Offer and Acceptance