Chapter 11 - Real Estate Contracts Flashcards
Assignment
A transfer of rights and duties under a contract.
Bilateral contract
An agreement that obligates both parties to perform in accordance with the terms of the contract.
Buyer brokerage agreement
An employment contract with a purchaser.
Competent
A party to a contract who possesses the legal capacity to enter into a binding contract (i.e., no mental defects and of legal age to enter into contracts).
Contract
An agreement between two or more competent parties to perform, or not perform, some legal act for a legal consideration.
Enforceable contract
A legally binding contract that the law will recognize.
Exclusive-agency listing
Employment contract given to one real estate broker, but the seller reserves the right to sell the property without paying a commission.
Exclusive-right-of-sale listing
A listing given to one broker who is assured of a commission no matter who sells the property.
Good consideration
A promise that cannot be measured in terms of money, such as love and affection.
Liquidated damages
The amount of valuable consideration specified in an agreement as a penalty for default.
Meeting of the minds
To reach an agreement on all terms in a contract.
Mutual assent
The making and acceptance of an offer (agreement).
Net listing
A listing created when a seller agrees to sell a property for a stated acceptable minimum amount.
Novation
The substitution of a new party and/or new terms to an existing obligation.
Open listing
An employment contract given to any number of brokers who work simultaneously to sell the owner’s property.
Option contract
A unilateral contract to keep an offer to sell or lease real property open for a specified period of time.
Parol contract
An oral agreement.
Procuring cause
The chain of events that results in a sale.
Statute of frauds
An act that requires that certain real estate instruments and contracts affecting title to real property be in writing in order to be enforceable.
Statute of limitations
An act that designates the period of time during which the terms of a contract may be enforced.
Unenforceable contract
A contract that would not stand up in a court of law because it does not meet the requirements of the statute of frauds or it runs beyond the statue of limitations.
Unilateral contract
An agreement that obligates only one party to perform.
Valid
Sufficient to be legally binding; enforceable.
Valuable consideration
The money or a promise of something that can be measured in terms of money.
Vendee
The buyer or purchaser of real property under an agreement of sale.
Vendor
The seller of real property in an agreement of sale.
Void
Contracts that do not meet all of the required elements of a valid contract have no legal effect.
Voidable
A contract that allows one of the parties to avoid his or her contractual duties (e.g., when one party is a minor or a party is mentally incompetent).
