Unit 11: Real Estate Contracts

Front 1

contract

Back 1

is an agreement between two or more parties to do or not to do certain things, supported by a sufficient consideration. the promise

Front 2

Listing agreement

Back 2

is a broker's employment contract with a seller. Typically, it is the sales associate who obtains the listing on behalf of the broker.

Front 3

Buyer brokerage agreement

Back 3

is an employment contract with a buyer.

Front 4

Sale and purchase contract

Back 4

is a contract between a buyer and a seller

Front 5

Option contract

Back 5

is an agreement to keep open for a specified period of time an offer to sell or lease real property

Front 6

valid contract

Back 6

Contractual capacity of the parties (competent parties)Offer and acceptance (mutual assent)Legality of object (legal purpose)Consideration

Front 7

meeting of the minds

Back 7

One party (the offeror) makes an offer, and the other party (the offeree) accepts that offer.

Front 8

Valuable consideration

Back 8

is the money or a promise of something that can be measured in terms of money.

Front 9

Good consideration

Back 9

is a promise that cannot be measured in terms of money, such as love and affection.

Front 10

Consideration

Back 10

whatever is given in exchange for something else

Front 11

statute of frauds

Back 11

requires that contracts conveying an interest in real property and contracts that are not to be performed within one year of the date created must be in writing and signed to be enforceable

Front 12

enforceable contract

Back 12

is a legally binding contract that the courts will recognize

Front 13

A contract does not have to be in any particular format to be valid, as long as it contains all the essential elements? TRUE OR FALSE?

Back 13

TRUE

Front 14

void contract

Back 14

was never a legal contract (FORGED NAME ON CONTRACT)

Front 15

voidable contract

Back 15

is a contract, but because of the manner or method in which it was brought about, one of the parties is permitted to avoid any contractual duties. (UNDER AGE MINOR SIGNING FOR A CAR)

Front 16

unenforceable contract

Back 16

Valid contract but courts will not enforce

Front 17

A buyer brokerage agreement is an employment contract between the brokerage and a buyer? TRUE OR FALSE

Back 17

TRUE

Front 18

Brokers and sales associates should NOT prepare deeds, mortgages, or promissory notes? TRUE OR FALSE?

Back 18

TRUE

Front 19

Formal Contract

Back 19

in written form and under seal (SEAL NOT REQUIRED)

Front 20

Informal Contract

Back 20

oral contract as opposed to a written contract or specialty instrument

Front 21

bilateral contract

Back 21

obligates both parties to perform in accordance with the terms of the contract

Front 22

unilateral contract

Back 22

obligates only one party to an agreement

Front 23

Express Contract

Back 23

parties state the terms and show their intentions in words, either orally or in writing, an express contract is created

Front 24

Implied Contract

Back 24

an agreement between parties demonstrated by the parties' acts and conduct

Front 25

Executory Contract

Back 25

it is not yet a fully performed contract (SOMETHING STILL NEEDS BE DONE TO THE CONTRACT)

Front 26

Executed Contract

Back 26

All of the parties to the contract have performed the promises stated in the contract

Front 27

The person making an offer is the offeree? TRUE OR FALSE?

Back 27

FALSE

Front 28

contract is terminated when any of the following happens:

Back 28

Performance,Mutual rescission,Impossibility of performance,Lapse of time AND Breach

Front 29

Specific performance

Back 29

Court orders the other party to perform according to the terms of the contract.

Front 30

Liquidated damages

Back 30

If the buyer breaches the contract, typically the seller claims the earnest money deposit as liquidated damages.

Front 31

Rescission

Back 31

The contract is canceled and the parties are restored to their original positions.

Front 32

Compensatory damages

Back 32

This involves a lawsuit to recover the actual amount of the monetary loss to either party (also called unliquidated damages).

Front 33

assignment

Back 33

refers to the transfer of a person's rights and duties under a contract to another person.

Front 34

novation

Back 34

The effect is to discharge the original party from the obligation.

Front 35

When a wronged party in a breached contract sues for compensatory damages, it is to have the courts force the other party to perform as the contract specifically states? TRUE OR FALSE?

Back 35

FALSE

Front 36

listing contract

Back 36

an employment agreement between a property owner and a real estate broker authorizing the broker to find a buyer (or tenant) for a certain property

Front 37

Exclusive-agency

Back 37

ONE BROKER

COMMISSION: To listing broker if not sold by owner

Front 38

Exclusive-right-of-sale

Back 38

ONE BROKER

COMMISSION: To listing broker no matter who sells

Front 39

Open LISTING

Back 39

ONE OR MORE BROKERS

COMMISSION: Only to broker who sells property

Front 40

net listing

Back 40

is created when a seller agrees to sell a property for a stated acceptable minimum amount

Front 41

Formula: Net Listing

Back 41

100% – listing commission percentage = percentage for seller's net

total seller's net ÷ percentage for seller's net = desired sale price

Front 42

buyer brokerage agreement

Back 42

an employment contract with the buyer

Front 43

A real estate licensee must give the owner a copy of a written listing agreement within 48 hours? TRUE OR FALSE?

Back 43

FALSE

Front 44

In a net listing agreement, the broker retains the proceeds in excess of the seller's net as commission? TRUE OR FALSE?

Back 44

TRUE

Front 45

attorney-in-fact

Back 45

may bargain and sign for the person who granted the power of attorney, provided that power is specific.

Front 46

The use of an "as is" provision in a contract for sale eliminates liability for failure to disclose all known material defects that affect the value of residential property? TRUE OR FALSE?

Back 46

FALSE

Front 47

Misrepresentation

Back 47

misstatement of fact or the omission or concealment of a factual matter.

Front 48

fraud

Back 48

deceptive practices

Front 49

A key element of a cause for action for fraud is that the party to whom a misstatement was made was damaged as a result of the misstatement? TRUE OR FALSE?

Back 49

TRUE

Front 50

Time period after title transfer, regarding a building code violation, to forward to the code enforcement agency the name and address of the new owner and a copy of the disclosures given to the buyer?

Back 50

Five days

Front 51

Time period sellers must allow homebuyers to conduct an inspection for the presence of lead-based paint

Back 51

Ten days

Front 52

Time period to enforce oral contracts under the statute of limitations

Back 52

Four years

Front 53

Time period to enforce written contracts under the statute of limitations

Back 53

Five years