Re Contracts

Front 1

What are contracts and agreements when selling property?

Back 1

They need to be voluntary agreement that do legal acts supported by legal consideration.

Front 2

What characteristics do enforceable real estate contracts have?

Back 2

They will have competent parties - legal age, mentally competent.

Front 3

When is a contract considered to be void?

Back 3

When one party is judged to be incompetent.

Front 4

When is a contract voidable?

Back 4

When contract is entered into with a minor, intoxicated person, or one thought to be incompetent.

Front 5

What is "meeting of the minds" when selling property?

Back 5

When offer and acceptance are by mutual consent.

Front 6

What do all transfer of real property need to have in order for them to be legal?

Back 6

They must be written and signed.

Front 7

For a contract classification bilateral means?

Back 7

Both parties are bound; one promise given in exchange for another; real estate offer to purchase, one promises to buy, one promises to sell.

Front 8

For a contract classification unilateral means?

Back 8

one party makes promise, if second party complies, first party is obligated i.e., option.

Front 9

What does an executed contract mean?

Back 9

Both parties have fulfilled obligations; completed.

Front 10

What does executory mean when referring to a contract?

Back 10

It means that one or both parties have not performed; something remains to be done.

Front 11

What does valid mean when referring to legal effects of contracts?

Back 11

Contract is enforceable and binding on both parties; complies with all essential elements of a contract.

Front 12

What does void mean when referring to legal effects of contracts?

Back 12

has no legal effect, unenforceable on both parties; same as no contract at all.

Front 13

What does voidable mean when referring to legal effects of contracts?

Back 13

It appears to be valid, but may be disfavored because one party signed when a minor, under duress, result of fraud; may be cancelled by party who would be injured if contract were carried out; i.e., minor or intoxicated.

Front 14

What does unenforceable mean when referring to legal effects of contracts?

Back 14

Appears to be valid on surface, but neigher party may sue to force performance; situation where performance is considered impossible; i.e., verbal contract.

Front 15

What is the performance of contract?

Back 15

Each party has certain rights and duties to fulfill. The question of when a contract must be performed is an important factor. "Time is of the essence". Contract must be performed within a specified time.

Front 16

What happens when one party withdraws after contract is accepted by both parties?

Back 16

Assignment or novation can happen.

Front 17

What does assignment mean when referring to selling contracts?

Back 17

Transferring rights and duties of a contract to another party; does not relieve original maker of liability.

Front 18

What does novation mean when referring to sell contracts?

Back 18

Substituting a new contract for an existing one, thus extinguishing the old contract and releasing original maker of all liability.

Front 19

What does discharge of contract mean?

Back 19

A contract is discharged when the agreement is terminated.

Front 20

What does "time is of the essence" mean?

Back 20

The contract must be performed within a specified time.

Front 21

What is a breach of contract?

Back 21

It is a violation of any of the terms or conditions of a contract without legal reasons. Example: A seller who fails to deliver title to the buyer breaches a sales contract. The breaching or defaulting party assumes certain burdens, and the non-defaulting party has certain legal remedies.

Front 22

What options does the buyer have if a seller defaults?

Back 22

Rescind or terminate contract and recover earnest money back to original position.
File a suit of specific performance and force seller to perform the contract.
Sue for compensatory damages - personal judgement.

Front 23

What options does a seller have if buyer defaults on the contract?

Back 23

Declare contract forfeited and retain earnest money; liquidated damages.
Rescind the contract and return the buyer's money back to original position.
Sue for specific performance.
Sue for compensatory damages - personal judgement.

Front 24

The written agreements most commonly used by licensees are

Back 24

Listing agreements and buyer agency agreements
Real estate sales contracts
Options agreements
Escrow agreements
Leases
Land contracts or contracts for deed.

Front 25

What is a real estate sales contract?

Back 25

It is the most important document in the sale of real estate. It establishes the legal rights and obligations of the buyer and seller.
It is an offer to purchase.
If the document is accepted and signed by the seller, it becomes a contract of sale.

Front 26

What is in a real estate sales contract?

Back 26

In addition to the essential elements of a contract several details appear in the contract.
The sales price and terms.
A legal description of the land.
A statement of the kind and condition of the title and the form of deed to be delivered by the seller.
The kind of title evidence, how many defects.
Statement of all terms and conditions of the agreement between the parties, and any contingencies.

Front 27

What is an offer to purchase?

Back 27

Is the meeting of the minds, when a prospective buyer is found a licensee helps that consumer prepare an offer to purchase. The offer is signed by the perspective buyer and presented by the licensee to the seller.

Front 28

What is an counteroffer?

Back 28

Any change my the seller to the terms proposed by the buyer creates a counteroffer. The original offer ceases to exist because the seller has rejected it. The buyer may accept or reject the seller's counteroffer. If the buyer desires they can make another counteroffer.

Front 29

Can an offer or counteroffer be withdrawn at any time?

Back 29

Yes, but it must be done before it has been accepted by the other party.

Front 30

What does acceptance of an offer mean?

Back 30

If the seller agrees to the original offer or a later counteroffer exactly as it is made and signs the document, the offer has been accepted and a contract is formed.
Note: a copy of the contract goes to both parties.

Front 31

When is an offer considered to be accepted?

Back 31

When the person making the offer has been notified of the other party's acceptance. Note: licensee needs to fax or email all offers, acceptances, or other responses as soon as possible to avoid questions of proper communication.

Front 32

What is equitable title?

Back 32

Gives the buyer an insurable interest in the property. This document comes after sales contract is accepted and before a deed is delivered. Buyer has right to demand transfer of legal title upon payment of full purchase price.

Front 33

What is the Uniform vendor and purchaser risk act?

Back 33

Specifically provides that the seller bear any loss that occurs before the tile passes or the buyer takes possession.

Front 34

What is earnest money?

Back 34

It is customary, although not essential, for a purchaser to provide a deposit when making an offer to purchase real estate. Money is placed in an escrow contract.

Front 35

What is commingling?

Back 35

Money mixed with a broker's personal funds.

Front 36

What is conversion?

Back 36

Brokers may not use earnest money funds for their personal use.

Front 37

What is an option?

Back 37

Gives the right to buy or lease property at a fixed price within a stated period of time; not revocable by Optionor (seller).
They are unilateral contracts binding on optionor (seller) only.

Front 38

What is the role of an optionee (buyer)?

Back 38

Pays for right and assumes no other obligation until option is exercised or expires.

Front 39

What is the role of an optionor (seller)?

Back 39

Is obligated to act if the optionee (buyer) gives notice of intent to exercise option.

Front 40

What rights does a minor have as an interesting party in real estate?

Back 40

Minor maybe a devisee (receiver) in a will.