9. Real Estate Contracts Flashcards
Agreement In Writing And Signed
Assignment
!e transfer in writing of interest in a contract, mortgage, lease, or other instrument.
Bilateral Contracts
An agreement entered into by two or more legally competent parties by the terms of which one or more of the parties, for a consideration, undertake to do or refrain from doing some legal act or acts. A contract may be either unilateral, where only one party is bound to act, or bilateral, where all parties to the instrument are legally bound to act as prescribed.
Breach
is a violation of any of the terms or conditions of a contract without legal excuse, as when a seller breaches a sales contract by not delivering title to the buyer under the conditions stated in the agreement.
Competent Parties
People who are recognized by law as being able to contract with others; usually those of legal age and sound mind.
Consideration
Something of value that induces a person to enter into a contract. Consideration may be “valuable” (money) or “good” (love and affection).
Contract
An agreement entered into by two or more legally competent parties by the terms of which one or more of the parties, for a consideration, undertake to do or refrain from doing some legal act or acts. A contract may be either unilateral, where only one party is bound to act, or bilateral, where all parties to the instrument are legally bound to act as prescribed.
Contract For Deed
A contract for the sale of real estate wherein the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until final payment. Also called an installment contract, land contract, or contract of sale.
Counteroffer
is created by oferee’s rejection or oferor’s revocation
Earnest Money Deposit
An amount of money, deposited by a prospective buyer as evidence of good faith under the terms of a contract, that is to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
Equitable Title
The interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another’s name.
Escrow Agreement
A contract, used when a transaction is closed through an escrow, that sets forth the duties of the escrow agent, as well as the requirements and obligations of the parties to the transaction.
Executed Contract
A contract in which all parties have fulfilled their promises; a contract is executed upon closing and funding.
Executory Contract
A contract under which something remains to be done by one or more of the parties.
Express Contract
An oral or a written contract in which the parties state the contract’s terms and express their intentions in words.
Implied Contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Legality Of Object
An essential component of a valid contract; a contract must be for a legal purpose and in compliance with public policy.
Liquidated Damages
An amount predetermined by the parties to an agreement as the total amount of compensation an injured party should receive if the other party breaches a contract; usually the earnest money in a residential sales transaction.
Novation
Substituting a new obligation for an old one or substituting new parties to an existing obligation. For example, a lender’s modifying note terms for a buyer who fell behind on payments.
Offer And Acceptance
This requirement, also called mutual assent, means that a “meeting of the minds” must occur. Offer and acceptance are technical legal terms. Courts look to the objective intent of the parties to determine whether they meant to enter into a binding agreement. !e agreement terms must be fairly definite and understood by both parties. Offer and acceptance requires that a contract be entered into as the free and voluntary act of each party.
Option
The right to purchase property within a definite time at a specified price. !ere is no obligation to purchase, but the seller is obligated to sell if the option holder exercises the right to purchase.
Specific Performance
to force the defaulting party to carry out the terms of the contract and/or seek such other relief as may be provided by law (such as, submit to arbitration or mediation, seek an injunction, or sue for compensatory damages)
Statute Of Limitations
That law pertaining to the period of time within which certain actions must be brought to court.
Texas Real Estate Broker-Lawyer Committee
A committee that drafts and revises standard contract forms to be used by real estate license holders.
Unenforceable Contract
A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, an oral listing agreement is generally unenforceable.
Unilateral Contract
A one-sided contract wherein one party makes a promise in order to induce a second party to do something. !e second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise.
Valid Contract
A contract that complies with all the essentials of a contract and is binding and enforceable to all parties to it.
Void Contract
A “contract” that has no legal force or effect because it does not meet the essential elements of a contract and therefore is not a contract.
Voidable Contract
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both parties.
