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Real Estate > Chapter 5 Contracts > Flashcards

Chapter 5 Contracts Flashcards

1
Q

What is the Option 26 Notice?

A

Decision made by NJ Supreme Court that allows RE licensees to prepare certain contracts and leases

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2
Q

A contract is…

A

An agreement between 2 people on earning consideration for preforming certain acts

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3
Q

What is a valid contract?

A

When it meets all the essential elements that a contract needs

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4
Q

How many essential elements are there to a VALID contract?

A

6

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5
Q

Legal Signatures (essential elements of a contract)

A

written contracts must be signed by ALL principals of the agreement to be legal in NJ

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6
Q

Legal Capacity (essential elements of a contract)

A

signatories must be of legal age, mentally competent, and not under any duress

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7
Q

Legality of Object (essential elements of a contract)

A

must be for a legal purpose to be enforceable

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8
Q

Consent (essential elements of a contract)

A

signatories must enter on their own free will

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9
Q

What is the Time of the Essence Clause?

A

every date shown in the contract must be honored unless parties agree to change them

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10
Q

What is the Inspections clause?

A

gives specific time limits and conditions which the various property inspections must be conducted

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11
Q

What is the Mortgage Commitment Clause?

A

gives the date that the buyer must provide the seller with a full mortgage commitment or either side of the transaction can cancel the contract

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12
Q

What is the Lead-Based Paint Disclosure

A

must be signed by the buyer and the seller and their agents . this is used for properties built prior to 1978

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13
Q

An express contract is…

A

when the term and conditions of the agent, given by the principal are CLEARLY stated and understood (can be written or oral)

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14
Q

An implied contract is…

A

when a principle does nothing to stop someone from acting as their agent

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15
Q

What is a bilateral contract?

A

Both/all parties are obligated to preform

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16
Q

What is a unilateral contract?

A

Only 1 party is obligated to preform

17
Q

Megan’s Law is…

A

licensees are not allowed to disclose to their clients if there sex offenders in the area … agents should direct their clients to the state police website

18
Q

What is a Land Contract?

A

a complex transaction where the seller provides financing to the buyer

19
Q

Underground Storage Tanks can…

A

pose a significant hazard to a property ;
licensees should enquire from sellers if they are aware of any buried fuel tanks, and if they are…you must disclose that to the buyer

20
Q

Seller’s Property Disclosure

A

(NOT required but it is HIGHLY recommended)

this document should be completed by the seller with NO help from you as the agent

21
Q

The Right of First Refusal/Home Sale Contingency Clause is…

A

the buyer must sell their current home to purchase another property

22
Q

Consideration (essential elements of a contract)

A

a contract must include something of value

23
Q

Fixtures are…

A

personal property that was attached to the land/property

24
Q

Mutual Assent (essential elements of a contract)

A

both/all parties must agree to all terms and conditions of the contract

25
Q

Off Site-Conditions Clause is…

A

disclosure clause that gives buyers the right to investigate if there are hazardous waste sites nearby

26
Q

What is a Void Contract?

A

Missing 1 or more of the essential elements of a contract

27
Q

NJ Statue of Frauds states…

A

all contacts for longer than 3 years must be in writing

28
Q

What is the Parol Evidence Rule?

A

If there is an argument over what was stated orally or written… the written evidence will take precedence

29
Q

Chattel is…

A

another word for personal property

30
Q

What is the term used to describe buyer’s monthly mortgage payment?

A 
PITI
Principle
Interest 
Taxes
Insurance
31
Q

What is an executed contract?

A

fully completed; all terms have been preformed

32
Q

What is the executory contract?

A

contract has been signed but not yet fully preformed

33
Q

What is the unenforceable contract?

A

contract may appear valid but is impossible to complete

ex…a house burning down a few days before settlement

34
Q

What is the enforceable contract?

A

one which has been property drawn up and signed which legally binds all parties to preform their duties

35
Q

What is a voidable contract?

A

appears to be valid but 1 party can cancel at any time if they so choose

Real Estate (5 decks)

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