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Florida RE exam > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

What are the elements of a valid contract?

A

Two or more competent parties
In agreement
About a lawful subject
For a consideration ($$)

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2
Q

Who is the offeror in a contract?

A

The buyer, it is the party who makes an offer

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3
Q

Who is the offeree in a contract?

A

The seller, they are receiving the offer

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4
Q

What are the steps required to create a contract?

A

Offer has to be made
Offer has to be accepted
Offer acceptance needs to be communicated back to the offeror

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5
Q

What happens to the original offer when a counteroffer is made?

A

Original offer is terminated by a counteroffer

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6
Q

Who is the offeror when the seller makes a counteroffer?

A

The seller becomes the offeror

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7
Q

What is valuable consideration?

A

anything with monetary value that is or can be converted into money

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8
Q

What is good consideration?

A

Type of consideration that cannot be expressed in terms of money, like love and affection

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9
Q

What are the permissible forms of a contract?

A

verbal (parol)
Written

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10
Q

What does the statute of frauds say a contract needs in order to be enforceable?

A

it needs to be in writing.

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11
Q

How long is the statute of limitations for oral/written contracts?

A

4 years for oral
5 years for written

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12
Q

What is an express contract?

A

Contract that exists when all terms and conditions are specified and agreed to by the parties (complete understanding exists)

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13
Q

What is an implied contract?

A

Contract that exists when the terms and conditions can be assumed by the nature of the agreement or the words and actions of the parties

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14
Q

What is a bilateral contract?

A

Contract that exists when both parties of the contract mutually agree to be bound to performance of the terms and conditions specified

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15
Q

What is a unilateral contract?

A

Contract that exists when only one party agrees to perform an act and is the only one bound by the terms of the contract

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16
Q

What is Executory? in terms of a contract

A

The status of a contract when any term or condition remains to be performed

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17
Q

What is executed? in terms of a contract

A

Status of a contract when all the parties have fully performed according to the terms and conditions of the contract

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18
Q

What can terminate an offer?

A

Withdrawal before it is accepted/communicated
Insanity of either party
Lapse of time
Death of either party
Counteroffer
Acceptance
Rejection
Destruction of the property

19
Q

What can terminate a contract?

A

Breach
Revocation
Renunciation
Lapse of time
Abandonment
Performance

20
Q

What is a suit for cancellation?

A

Legal action that can be taken by a party who is not in breach of contract, asking the court to cancel the contract and put parties back in their original position

21
Q

What is a suit for specific performance?

A

Legal action that can be taken by a party who is not in breach of contract to require the other party to perform as agreed in the contract

22
Q

What is suit for damages? (Compensatory damages)

A

Legal action that can be taken by the injured party to request compensation for financial loss

23
Q

What are liquidated damages?

A

Type of damages that are agreed to by the parties in the contract in the event of a breach by either party

24
Q

What are unliquidated damages?

A

Type of damages that are not specified in the contract but are determined by a court

25
Q

What is an equitable title?

A

Type of title that is acquired by the buyer as a result of having entered into a binding contract to purchase a property

26
Q

What is an exclusive right of sale listing?

A

Type of listing agreement where the seller lists the property with only one broker and agrees to pay commission to that broker no matter who sells the property

27
Q

What is an open listing?

A

Type of listing agreement where the seller promises to pay commission to any broker who brings a successful buyer

28
Q

What is an exclusive listing?

A

Type of listing agreement where the seller lists the property with only one broker but reserves the right to sell the property themselves without paying a commission

29
Q

Which type of listing agreement provides the best protection to the broker’s commission?

A

Exclusive right of sale listing

30
Q

What is an example of a bilateral contract?

A

Real estate sales contract
Exclusive right of sale listing agreement
Exclusive agency contract
Lease agreement

31
Q

What is an example of a unilateral contract?

A

Option Contract
Open listing

32
Q

What is in a commercial sale written listing agreement that protects the broker’s commission?

A

That the broker has a lien against the seller’s net sales proceeds upon performance by the broker

33
Q

What is in a commercial lease agreement that protects the broker’s commission?

A

That the broker has a lien against the owner’s interest in the commercial real estate

34
Q

What is a unique aspect of a net listing?

A

Seller specifies the amount they want to receive upon the sale of the property after the broker’s commission and closing costs

35
Q

What can terminate a listing?

A

Breach
Renunciation (mutual consent needed)
Revocation
Lapse of time
Abandonment
Performance
Destruction of the property
Death or insanity
Bankruptcy

36
Q

When does a broker that was employed to effect a sale get their commission?

A

When they locate a potential purchaser and the title successfully passes from seller to buyer at closing

37
Q

When does a broker that was employed to find a purchaser get their commission?

A

When they find a ready, willing, and able purchaser, whom signs a binding contract

38
Q

What is a unique aspect of an option contract?

A

Potential buyer has the right but is not obligated to buy the property during a specified period of time at a specified price

39
Q

Who are the parties to an option contract?

A

Optionor - seller
Optionee - buyer

40
Q

What is option money?

A

Consideration ($$) given to the optionor (seller) by the optionee (buyer) in an option contract to sustain an enforceable agreement

41
Q

What is a contract for deed? a.k.a. agreement for deed, land contract, conditional sales contract, or installment sale contract

A

contract which is a type of seller financing where the seller (vendor) holds the title while the buyer (vendee) makes payments to the seller

42
Q

What is a unique aspect of an “as is” contract

A

The seller does not agree to pay for any repairs. Material facts must still be disclosed

43
Q

Which type of contracts can a real estate licensee prepare without additional licensing?

A

Listing contract
Sales contract
Option Contract
Buyer representation agreements

Florida RE exam (18 decks)

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