Your Client, Contracts, and Closing Flashcards
Definition of contract
Agreement between two or more parties that is enforceable by law
Must be between two or more parties
Contract can be written or verbal?
Since 1677, legislation mandates that all Canadian contracts be written
Every valid and enforceable contract must include
Offer and Acceptance
Consideration
Capacity
Consent
Legality
3P’s of Real Estate Contract
Must be included in an offer
Parties
Property
Price
Reasons why true consent may not occur
Misrepresentation
Mistake
Duress
Undue Influence
Privity of Contract
A unique and legally binding relationship which exists between parties to a contract
Parties to a contract can assign these rights to willing outside parties
Term in a real estate contract
Purchase price
possession date
Real Property Report (RPR)
All appliances in working order
Conditions in a Real Estate contract
Clauses in a contract which must be satisfied or waived before the contract becomes firm
Home inspection
Obtaining financing
Conditions precedent
Required to be completed prior to the expiry of the condition date for the contract to be considered enforceable
Conditions subsequent
Conditions that, should they occur, may terminate a contract.
Party A agrees to purchase Party B’s house, subject to being transferred to a new location for work on or before a certain date
Five common methods to end or discharge a contract
Performance
Mutual Agreement
Frustration
Operation of law
Breach
What a party can claim if a breach of contract occurs
Monetary damages
Quantum meruit
Specific performance
Injunction
Three categories of monetary damages
Restitution
Expectation
Reliance
Land use Districts
Residential
Multi-residential
Commercial
Industrial
Agricultural
Special purpose
Joint tenant
Each tenant has an equal share
if a tenant passes, each remaining tenant acquires equal parts of the remaining shares
Tenancy in common
Each tenant owns a specific share of the property
Upon passing their share is acquired by their estate/beneficiaries
Test: What are the elements of a enforceable contract?
Mutual agreement
Genuine consent
Capacity of parties
Consideration
Test: Ways in which a contract can be terminated
Breach of contract
Agreement
Frustration
Nonfulfillment of a condition
Performance
Test: Does the dower act apply if either party has spent one night in the property
Yes
Test: Can a lawyer correct error in the contract when drawing up the formal documents
No, contracts are legally binding and cannot be changed after they’re signed
Test: The rights of the spouse
Dower rights
test: Duress
When one party does not enter into a contract on their own free will
Test: A agent may place the interests of the client above all else but the law - True or false
True
Test: The duty of confidentiality survives the termination of an agency agreement or a change in brokerages by a licensee
True
