Chapter 11 Contracts

Question 1

Express contracts

Answer 1

Contracts that are expressed either in writing or orally

Question 2

Implied Contract

Answer 2

Agreement of parties are demonstrated by their acts

Question 3

Bilateral Contract

Answer 3

Both parties promise to do something

Question 4

Unilateral Contract

Answer 4

One party make a promise to do something if the other party does something. The second party is not legally obliged but if they do that thing, the first party is legally obliged to to what they promised

Question 5

Executed contract

Answer 5

When both parties have fulfilled their obligations

Question 6

Executory Contract

Answer 6

When only one or neither parties have fulfilled their contract

Question 7

Elements of a contract

Answer 7

• Offer and Acceptance
• consideration
• legally competent parties
• Consent
• Legal purpose

Question 8

Validity of Contract

Answer 8

• valid
• void
• voidable
• unenforceable

Question 9

Contract is Valid when

Answer 9

It has the all of the elements to make it enforceable

Question 10

Contract is void when

Answer 10

Lacks one or more elements has no legal force or effect

Question 11

Contract is voidable when

Answer 11

Seems to have all legal elements but may be rescinded by one or both parties

Question 12

Contract is Unenforceable when

Answer 12

Hs the legal elements and is enforceable only between the parties

Question 13

Assignment

Answer 13

Promises may be assigned to a third party but first party is still responsible for them

Question 14

Novation

Answer 14

Substitution of a we contract

Question 15

Reasons for terminating a contract

Answer 15

• Partial Performance
• Substandard Performance
• Impossibility of Performance
• operation of law
• recession (a cancelation of contact that puts parties back where they were before it started

Question 16

Contracts used in real estate

Answer 16

• listing and buying agency agreements
• Real estate sales contracts
• option agreements
• escrow agreements
• Leases
• land contracts or contracts for deed

Question 17

Acceptance

Answer 17

When seller agrees to offer and buyer has been notified of the acceptance

Question 18

Equitable title

Answer 18

The interest a buyer has in the property after contract has been executed and before the title has been transfers

Question 19

Liquidated damages

Answer 19

A certain amount of money that is agreed upon by both parties in case contract is breached. Non breaching party is entitled to money.

Question 20

Contingencies

Answer 20

Conditions that must be satisfied before a sales contract is enforceable.

• Actions Necessary
• Time frame
• Who is responsible

Question 21

Addendum

Answer 21

Additions to contract

Question 22

Amendments

Answer 22

Changes in contract

Question 23

Options

Answer 23

A contract with an option to by within a specified time

Question 24

Land contract

Answer 24

Aka
Contract for deed
Bond for title 
Installment contract
Land sales contract
Articles of agreement for warranty deed

Seller remains owner until buyers pays it off

Question 25

Binder

Answer 25

A shorter document used in place of a sales contract until sales contract has been drawn up.

Question 26

Earnest money deposits

Answer 26

A deposit giving to the seller by the buyer.
Customary but not required.
Money is but into the brokers escrow account

Question 27

Escrow

Answer 27

Earnest money given to be held by broker.