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72 Cards in this Set
- Front
- Back
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Contract
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Voluntary agreement between 2 or more parties
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Requirements for a Valid Contract
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Competent Parties
Offer & Acceptance Consideration Proper Legal Form Description Legality of purpose Reality of Consent Signatures |
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Competent Party
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Person must have the legal capacity to contract
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Consideration
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Anything of value, something bargined for and received
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Valuable Consideration
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Something of value given or promised by one party in exchange for the promise of the other (Promise to pay money in exchange for an item that has monetary value)
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How are contracts in real estate deemed to be enforceable?
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The MUST be in writing.
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What determines the documents that must be in writing to be enforceable in a court o flaw?
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Statute of Frauds
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Other terms for Offer and Acceptance include
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"mutual assent" or "meeting of the minds"
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To remember the elements of a contract think of:
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Writing a Check: A check must have offer and acceptance, consideration, proper legal form, description, legality of purpose, reality of consent, and signatures.
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Types of Contract include:
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Express
Implied Bilateral Unilateral Executed Executory |
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What type of contract can be oral or written?
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Express
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What type of contract is created by the acts of the parties?
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Implied
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What type of contract is created when both paries have made promises?
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Bilateral
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Sales contracts and leases are examples of what type of contract?
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Bilateral
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What type of contract is created with a one-sided agreement?
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Unilateral
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What type of contract is an option contract that has been exercised?
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Bilateral
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What type of contract is an option contract?
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Unilateral
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What type of contract is created once all parties have fulfilled their promises?
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Executed
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A type of contracted that is created when one or both parties have obligations to perform?
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Executory Contract
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What are the 4 types of classifications for contracts?
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Valid
Void Voidable Unenforceable |
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What type of contract meets the essential elements of contract law?
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Valid Contract
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What type of contract has no legal force or binding effect?
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Void Contract
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What type of contract can be affirmed or rejected at the option of one of the parties?
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Voidable Contract
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What is an example of a voidable contract?
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Most sales contracts, because the contain contingency clauses.
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Contracts entered under duress, misrepresentation, or fraud are considered
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Voidable
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What type of contract will not be enforced in the court of law?
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An Unenforcable contract
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What documents does the Statute of Frauds require to be written and signed?
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Sale Contracts, Mortgages, Deeds, Land Contracts & Leases and listings for more than one year.
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The Parol Evidence Rule does what?
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It prevents admission of other oral agreements when a final written agreement has been finalized.
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Apply the PER to real estate.
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No oral agreement is enforcable unless they're in writing between the parties involved.
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What is the Uniform Commercial Code?
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It's a uniform law that governs commercial transactions, sale of goods, secured transactions and negotiable instruments.
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To create a "meeting of the minds"
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The terms of a contract must be clear and definite.
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Any ambiguity in a contract will be
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construed against the writer.
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Time is of the essence means
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everything must be preformed iwthin the time frame specified.
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What happens if a requirement isn't met?
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Promissor would have breached the contract and the promissee would be justified in a recission of the contract.
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An "As is" Clause
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means a buyer is purchasing the property as he sees it.
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Does the seller have to disclose property defects?
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Yes the seller is still bound to disclose all defects, but is relieved from liability for patent defects but is still liable for undisclosed known defects.
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What does Caveat Venditor mean?
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"Let the seller beware"
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Caveat Emptor
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Let the buyer beware
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Liquidated Damage Clause
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Contractual provision which determines in advance measure of damages if a party breaches the agreement.
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What does an exculpatory clause do?
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It relieves a party from liability resulting from a negligent or wrongful act.
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What are the intensions of an exculpatory clause in a lease?
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Hold the landlord harmless form liability should the tenants sustain personal injury on the rental property
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Changes on a pre printed form should....
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be made before parties sign and all changes should be initialed.
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What takes precedence over a pre-printed form?
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Anything hand written or typed.
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If there is an obvious typographical error in a contract, does it affect the contract?
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No.
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What is a court action to force the completion of a contract?
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Specific performance
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If all contingencies of a contract have been met, but the seller refuses to sell, a buyer may sue. This is an example of
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specific performance.
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______________ occurs when there is an agreement between contracting parties to waive all the remaining duties of performance and terminate the contract.
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Recission
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Offer & Acceptance is also known as,
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Meeting of the Minds or Mutual Assent.
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To offer means,
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To present something for acceptance
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The Offeror is
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The party giving the offer
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the offeree is
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the party receiving
(the seller) |
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Does a counter offer reverse the legal position between two parties?
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Yes, the seller becomes the offeror and buyer becomes the offeree.
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An offer must be accepted with out change by the offeror?
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Fales, the offer must be accepted by the offeree or the offeree's authorized agent.
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Can an offer be revoke?
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Yes, but notice of revocation must be received by the offeree prior to the acceptance of the offer.
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When can offers be terminated?
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Death or Insanity of the offeror or offeree, destruction of the property, or a material change in circumstances.
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Under this, a contract becomes effective when the offeree deposits the acceptance in the mail box. & the Withdrawal of an offer must be received before it is valid.
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Mailbox Theory
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Under an option contract who is the optionor and optionee?
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The seller is the option"or" and buyer is the option"ee"
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Is an option contract a unilateral contract?
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Yes, the seller is obligated to sell and the buyer has the option to buy.
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In an option contract what happens once the buyer exercises the option?
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It becomes a bilateral contract.
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Is the option assignable to another party?
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Yes, unless the contract forbids it.
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What type of option occurs when the lessee agrees to elase the property with an option to buy?
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A Lease Option.
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_____________, This gives a potential buyer the first right to make an offer if a property owner decides to sell.
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Right of First Refusal.
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What is the difference between a ROFR and an Option?
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A ROFR can only be exercised if the property owner decides to sell.
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What is the transfer of contract rights from one party to another?
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An assignment
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What types of contracts are usually not assignable?
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Listings, Personal Service, Property Management
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The Assignor is
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The party transferring contract
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The Assignee
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party receiving contract
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What is the substitution of one contract for another?
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Novation, when given it releases liability.
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What is a contract for deed, agreement to purchase and sale, or land installment contract?
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Land Contract
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Who is the Vendor?
Who is the Vendee? |
Seller - "or"
Buyer - "ee" |
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In an Land contract, what is equitable interest? Who holds it?
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The buyer holds EI and it gives the holder right to acquire legal title at some point in the future.
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What are ways contracts are terminated?
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Performance, Assignment, Novation, Breach, Mutual Agreement, Operation of Law, Recission, Impossibility of Performance, Substantial performance, & partial performance
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