Chapter 14: Real Estate Contracts Flashcards
Bilateral Contract
A contract in which both parties enter into mutual promises
Competent
Having the mental and age capacity to enter into a contract
Contract
An agreement between two or more competent parties, supported by consideration, to do, or not to do, a certain legal act
Exclusive Agency Listing
Listing agreement whereby the seller may find a buyer without owing a commission, although the seller agrees not to list the property with any additional brokers
Exclusive Right of Sale
Listing agreement whereby the broker earns a commission no matter who procures the buyer
Liquidated Damages
A specific dollar amount of damages to be paid by a breaching party as specified in the contract
Meeting of the Minds
An agreement and understanding between the parties concerning the intent of their contractual terms
Net Listing
A listing agreement whereby the broker keeps any funds over a definite net amount to be received by the seller
Novation
Substitution of a contract and a party for another contract and another party
Open Listing
Listing agreement whereby the seller promises to pay a broker a commission if that broker procures a buyer. The seller may sell the property itself without owing a commission, and the seller may enter an open listing with several different brokers simultaneously.
Option
A right, given as a continuing offer, to purchase real property upon specific terms within a given period of time
Statute of Frauds
Body of law that states that certain types of contracts must be in writing to be enforceable
Statute of Limitations
Establishes time limits for filing litigation
Unenforceable
Status of a contract when it violates the Statute of Frauds
Unilateral Contract
A contract whereby only one party undertakes a promise or obligation
Valid
When a contract satisfies all legal requirements
Void
A contract the law will not recognize under any circumstances
Voidable
Contract involving a minor or other incompetent party wherein the incompetent part has a choice to enforce or rescind the contract
The type of listing that is most beneficial to a real estate licensee is the:
Exclusive Right of Sale listing
Which type of listing is disfavored in Florida and should be avoided:
Net listing
An option contract is a type of:
A Unilateral contract B Bilateral contract C Voidable contract D Unenforceable contract
Unilateral contract
All of the following are essentials of a valid contract except:
A Capacity of the parties B Legality of subject matter C Consideration D In writing
D In writing
Which of the following is an example of a voidable contract?
A An oral lease for 6 months
B A real estate contract signed by a 17 year old
seller.
C A verbal contract wager on the Super Bowl
D A contract to pay a kickback
A real estate contract signed by a 17 year old seller.
Which of the following conditions must have occurred if an oral real estate sale and purchase contract is enforceable under the partial performance doctrine?
A Part of the purchase price must be paid B The buyer must take possession C The buyer must make improvements D Both B and C
A Part of the purchase price must be paid
Which type of listing must be in writing?
Exclusive right of sale
The Florida Statute of Limitations requires actions based upon breach of a written contract to be filed within what period of time:
5 years
On Saturday, Broker Barbara shows a house to Sandy, a prospective buyer. On Sunday, Broker Al shows the same house to Sandy, but on Sunday Sandy decides to make an offer on the house, and that offer is accepted. When Barbara learns about the contract, she declares that she is entitled to the commission since she showed the house to Sandy first. Which of the following statements is most accurate?
A Barbara is correct. Since she showed the
house first, she should receive the sales
commission.
B Barbara is partly correct. Since she showed
the house first, she should receive one-half of
the commission.
C Barbara is incorrect. Since she was not the
procuring cause of the sale, she is entitled to
no commission.
D Barbara is incorrect. The person who shows
the house last always earns the commission.
C Barbara is incorrect. Since she was not the procuring cause of the sale, she is entitled to no commission.
Buyer Tom has lawfully assigned his rights to a Purchase and Sale Agreement to Jeff. One day before closing, Jeff announces he is not going to perform and defaults the contract. What are the Seller’s rights?
The seller can sue either Tom or Jeff for specific performance or compensatory damages
Offers can be terminated in each of the following ways except:
A Acceptance B Rejection C Counteroffer D Closing
Closing. - Offers can be terminated by Accepting, Withdrawal or Rejecting the offer, producing a counter offer, Lapse of time, Destruction of the property or death or Insanity of either party.
If a listing agreement is in writing, the seller is entitled to a copy of the agreement within:
24 hours
Most real estate sale and purchase contracts provide that if the Buyer defaults, the seller may retain the earnest money deposit as:
Liquidated damages
A parol contract:
A Is an oral contract B Is also known as a formal contract C Is unenforceable D Has nothing to do with real estate
Is an oral contract
Federal law requires lead based paint disclosures for properties that were constructed prior to:
1978
