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CH 11 - Real Estate Contracts > 11 - Contracts > Flashcards

11 - Contracts Flashcards

1
Q

Listing Contract

A

employment contract for professional services negotiated between member of public and real estate broker

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2
Q

Purchase and Sale Contract

A

negotiated between owner of property and potential buyer. specifies terms and conditions in trasnfer of ownership

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3
Q

Contract

A

agreement between 2 or more competent parties that create obligation to do, or not do, a certain thing

can be written or oral

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4
Q

Assignment

A

sale, transfer, or subrogation of rights in a contract

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5
Q

Assignee

A

party who receives the rights in a contract

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6
Q

Assignor

A

party who grants the rights in a contract

not relieved of performance after assignment

if assignee fails to perform, assignor is responsible for performance of contract as originally agreed

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7
Q

4 Essential Elements of Valid Contract

A

Lawful Subject
Offer & Acceptance
Consideration
Competent Parties

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8
Q

Lawful Subject

A

contract must be lawful (legal) and not against public welfare

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9
Q

Offer & Acceptance

A

“meeting of the minds”

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10
Q

Consideration

A

contract must specify “sufficient consideration” (valuable $ or good, which are things not expressed with money)

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11
Q

Competent Parties

A

two or more competent parties

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12
Q

Statute of Frauds

A

enacted 1677 in England

protection against fraud in the sale of real property

requires contract to be in writing for a transfer of a right or interest of land)

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13
Q

COLIC

A

C - competent parties

O - offer and acceptance

L - Lawful subject

I - In writing

C - Consideration

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14
Q

Statute of Limitations

A

time limits for legal action to enforce rights under a contract

Oral - action within 4 years

Written - action brought within 5 years

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15
Q

Express Contract

A

all terms and conditions are specified and agreed to by the parties

complete understanding

can be oral or written

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16
Q

Implied Contract

A

SOME terms and conditions can be assumed by nature of the agreement or words and actions of parties

oral or written

can be an implied provision of another contract

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17
Q

Bilateral Contract

A

both parties mutually agree to be bound to performance of terms/conditions

promise for a promise

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18
Q

Unilateral Contract

A

one party expressly agrees to perform an act. this is the only person bound by terms of contract.

promise in exchange for act

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19
Q

Executory Contract

A

if any term or condition remains to be performed

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20
Q

Executed Contract

A

when all parties have fully performed

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21
Q

Formal Contract

A

written

contains all elements of valid contract

may recorded in public record

enforceable under Statute of Frauds

“wholly written and under seal”

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22
Q

Informal (Parol) Contract

A

oral agreement

may or may not contain elements of valid contract

not enforceable under statute of frauds

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23
Q

Void contract

A

unenforceable

  • impossible or illegal
  • became illegal due to changes in laws
  • legal but declared null by courts b/c it violated fundamental principles or is against public policy
24
Q

Voidable contract

A

valid agreement that can be enforceable

  • one or more parties can revoke or cancel at any time
  • can be legally rejected if a party states a defect
25
Q

Reasons for a voidable contract

A
  • failure by a party to disclose material fact
  • mistake, misrepresentation or fraud
  • coercion, undue influence or duress
  • lack of capacity
  • breach
  • minor enters into contract with adult
26
Q

Acceptance

A

an offer accepted by the parties becomes a contract

27
Q

Withdrawal

A

offeror can withdraw an offer at any time up to the time that acceptance of offer has been communicated

28
Q

Rejection or counteroffer

A

offer is terminated if offeree rejects the offer

counteroffer is considered rejection of offer

29
Q

Lapse of time

A

offer terminates at the end of time specified for it

30
Q

Death or insanity

A

terminates the offer

31
Q

Destruction of property

A

when improvements are destroyed by fire or natural disaster, offer is terminated

32
Q

WILD CARD

A

W - withdrawal
I - insanity
L - lapse of time
D - death of either property

C - counteroffer
A - acceptance
R - rejection
D - destruction of property

33
Q

Contract Termination

BRRLAP

A 
Breach
Revocation
Renunciation
Lapse of Time
Abandonment
Performance
34
Q

Breach

A

a party fails to meet obligations

injured party can seek relief in court

35
Q

Revocation

A

can legally revoke and terminate the contract

sometimes they have power to do so, but not the legal right

36
Q

Renunciation

A

mutual consent of both parties to terminate

37
Q

3 remedies for breach of contract

A

Suit for Cancellation (Rescission)

Suit for Performance

Suit for Damages

38
Q

Liquidated Damages

A

specified and agreed to upon contract

both parties have agreed to penalty in the event of a breach by either party

usually involves seller retaining deposit if buyer defaults

39
Q

Unliquidated Damages

A

not specified in contract, but determined by court

suit for damages

40
Q

To act as the buyer’s broker and receive compensation from them, a licensee may use an _______

A

Exclusive Buyers Brokerage Agreement

41
Q

Agreement that establishes exclusive representation w/ buyer, provides retainer fee, contains limitation of licensee’s liability

A

Exclusive Buyers Brokerage Agreement

42
Q

right to buy property during specified period of time

unilateral

no promise to buy property, just an option

A

option contract

43
Q
  • in writing
  • price and terms
  • length of time
  • legal description
  • consideration ($)
A

option contract requirements

44
Q

token consideration is a ____, not a ______

A

listing, not a contract.

45
Q

Another name for contract for deed is _____

A

installment contract

46
Q

in what circumstances is a broker’s commission subject to forfeiture?

A

The broker violates a fiduciary duty.

47
Q

To which of the following does the phrase “meeting of the minds” refer?

A

Offer and acceptance

48
Q

Which statute requires a purchase and sale contract to be in writing to be enforceable?

A

Statute of Frauds

49
Q

expiration of specified time period, death of offeror, counteroffer can all do what?

A

terminate an offer

50
Q

what cannot terminate an offer?

A

a failure to obtain a binder deposit

51
Q

What type of contract exists when the court determines that a contract existed due to the actions of the parties?

A

Implied contract

52
Q

A buyer and seller entered into a Purchase and Sale Agreement. The buyer chose not to close and defaulted on the agreement. The seller claimed the escrow deposit. What type of damages can be sought?

A

Liquidated damages to the seller

53
Q

what is true of an “as is” provision in a sales contract?

A

The seller is still required to disclose all known defects that may materially affect the value of the property.

54
Q

What is true regarding the Statute of Frauds?

A

it requires certain contracts to be in written form to be enforced in court

55
Q

Option contract is a _____ contract that is binding upon _____

A

unilateral, Optionor

56
Q

Acceptance, Rejection, Withdrawal are all ways that an____ can be _____

A

offer, terminated

57
Q

Breach, Performance, or Lapse of time are examples of _____

A

valid ways to terminate a contract

CH 11 - Real Estate Contracts (5 decks)

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