Chapter 11 - Principles of Real Estate Contracts Flashcards
A void contract is one that is …
not legally enforceable.
The legal proceeding or legal action brought by either the buyer or the seller under a purchase contract to enforce the terms of the contract is known as …
specific performance
The essential elements of a contract include all of the following EXCEPT
- offer and acceptance
- notarized signatures
- competent parties
- consideration
-Notarized Signatures
A written real estate contract is assumed to be the complete agreement of the parties because of the …
parol evidence rule
The term ‘rescind’ means
cancel
All of the following are essential to the formation of a contract EXCEPT
- Offer
- Acceptance
- Consideration
- Performance
-Performance
A bilateral contract is one in which
-the promise of one party is given in exchange for the promise of the other party.
The law that requires real estate contracts to be in writing to be enforceable is the
-statue of frauds
A breach of contract is a refusal or a failure to comply with the terms of the contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT
- sue the seller for a specific performance
- rescind the contract and recover the earnest money
- sue the seller for damages
- sue the broker for non-performance
-sue the broker for non-performance
Every real estate agent contract must have
an offer and acceptance
At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller claimed that the soil was firm enough to support construction of a building when, in fact, the seller knew it was not. This contract is …
voidable by the buyer because of fraud
After the buyer and the seller have signed a sales contract, the seller changes his mind and defaults. The buyer sues the seller to force him to go through with the contract. This is known as a suit for …
-specific performance
A person must accept an offer to enter into a contract before …
the death of the offeror.
A contract agreed to under duress is
voidable
All of the following will terminate an offer EXCEPT
- revocation of the offer before acceptance
- death of the offeror before acceptance
- a counteroffer by the offeree
- an offer from a third party
-an offer from a third party
An offeree has the right to …
reject an offer
Which of the following BEST describes a contract that is voidable?
- The contract has no legal effect
- The contract is oral
- The contract may be valid
- The contract has not been signed
-The contract may be valid
A broker took a listing and later discovered that the client was previously declared legally incompetent. The listing is now
of now value to the broker because it is now void.
To assign a contract for the sale of real estate means to
transfer one’s rights under the contract
A lender agrees to release the first borrower from all financial obligations and let the second buyer be responsible for the repayment of the debt. This is an example of
-A novation
If a buyer defaulted some time ago on a written contract to purchase a seller’s real estate, the seller can still sue for damages if he is not prohibited from doing so by the
-statue of limitations
A person approaches an owner and says, “I’d like to buy your house.” The owner says, “Sure” and they agree upon a price. What kind of contract is this?
-Unenforceable
What is the outcome in Pennsylvania when a real estate licensee provides legal advice to the sellers or the buyers?
-criminal offense
In Pennsylvania, an electronic signature is
-valid
A buyer and a seller sign a contract to purchase, the seller backs out and the buyer sues for specific performance. What is the buyer seeking in this lawsuit?
-Transfer of the property
If a real estate sales contract states that time is of the essence and the stipulated date of transfer comes and goes without a closing, the contract is
-breached
In filling out a sales contract, someone crossed out several words and inserted others. To eliminate future controversy about whether the changes were made before or after the contract was signed, the usual procedure is to
have both parties initial or sign and date the margin near the change.
Under the statue of frauds, contracts for the sale of real estate must be
in writing to be enforceable
A man has an executory contract to buy property but would rather let his friend by it instead. If the contract allows, the friend can take over the man’s obligation by the process known as
-assignment
Which of the following is NOT one of the essentials of a valid contract?
- Legality of Object
- Earnest Money
- Consideration
- Offer and acceptance
–Earnest Money
A son forged his mother’s signature on the listing agreement because he didn’t want to bother her with the details. What is the status of the listing agreement?
-Void
While suffering from a mental illness that caused delusions, hallucinations, and loss of memory, a person signed a contract to purchase real estate. Under these conditions, what is the status of the contract?
-Voidable
The buyer asked the real estate licensee to prepare an agreement to purchase because the buyer wanted to make an offer. With these instructions, the licensee
is permitted to fill in the blanks of a pre-printed form
Pennsylvania’s Plain Language Act requires that many consumer contracts …
-use short words and be written in the active voice
Which of the following are legal in Pennsylvania?
- Contracts written in Spanish, if the participants are native Spanish speakers
- Only contracts written in English on paper
- Electronic signatures, records, and writing
- Electronic documents, but not signatures
-Electronic signatures, records, and writing
A void contract is …
not legally enforceable
The legal proceeding or legal action brought by either the buyer or the seller under a purchase contract to enforce the terms of the contract is known as
-special performance
A written real estate contract is assumed to be the complete agreement of the parties because of the …
Parole evidence rule: under a parole evidence rule, a written contract takes precedence over oral agreements or promises.
What is the statue of limitations in Pennsylvania to file for breach of contract?
Four Years
