Ch. 12 Real Estate Contracts Flashcards
Addendum
any provision added to an existing contract that may change or be an addition to the content of the original/the addendum mentions the original contact and must be signed by all parties
Amendment
change or modification to the existing content of a contract/must be separately initialed or signed by all parties
Assignment
refers to a transfer of rights or duties under a contract
Bilateral Contract
both parties promise to do something; one promise is given in exchange for another
Breach of Contract
a violation of any of the terms or conditions of a contract
Consideration
A contract must be based on consideration, something of legal value offered by one party and accepted by another as an inducement to perform or to refrain from performing some act
Contingencies
Conditions that must be satisfied before a sales contract is fully enforceable (create a voidable contract)
Contract
a voluntary agreement or promise between legally competent parties, supported by legal consideration, to perform (or refrain from performing) some legal act
Counteroffer
any change by the seller to the terms proposed by the buyer
Disclosure
Relevant information or facts that are known or should have been known/the act of revealing something
Earnest Money
money deposit is evidence of the buyers intentions to carry out the terms of the contract in good faith
Enforceable Contract
meets all the elements of a valid contract, including compliance w/any applicable statute of frauds or other law that requires it to be in writing and signed by the parties
Executed Contract
One in which all parties have fulfilled their promises; the contract has been performed
Executory Contract
when one or both parties still have an act to perform/ A sales contract is executory contract from the time it is signed until closing;ownership has not yet changed hands, and the seller has not received the sales price. At closing , when the contract terms have been met, the sales contract is executed
Express Contract
the parties state the terms and show their intentions in words either oral or written
Implied Contract
the agreement of the parties is demonstrated by their actions and conduct
Land Contract
also called a contract for deed, contract of sale, a bond for title, installment contract, land sales contract, or articles of agreement for warranty deed, –under a typical land contract, the owner/seller retains legal title–seller is not obligated to execute and deliver a deed until the terms of the contract have been met
Liquidated Damages
damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach
Novation
substitutes a new contract or party for the original
Offer and Acceptance
The sales contract sets our the offer by the buyer that is accepted by the seller
Option
contract by which an optionor (owner) gives an optionee (prospective buyer) the right to buy or lease the owners property at a fixed price within a certain period of time
Owner financing
the seller provides credit for all or part of the funds that will allow the buyer to move forward with the transaction
Purchase Money Mortgage
buyer receives equitable title to the property (once contract is executed) but places a security interest on it in favor of the seller
Rescission
returns the parties to their original positions before the contract
