Chapter 6: Contracts Flashcards
If there is a “time is of the essence” clause in a contract, failure of a party to the contract to perform within the time specified will render the contract __________ .
VOID
The failure of one party to perform a duty under the terms of a contract is known as:
breach of contract.
In California, buyer paid liquidated damages to a seller of a one to four unit dwelling, when the seller intends to occupy one of the dwellings, cannot exceed:
3% of the sales price if the amount of earnest money deposit is over 3%.
A minor change in an offer by the offeree constitutes:
a counter offer
In order to be valid, a contract must have certain required elements. Which of the following is not a required element?
Notarization
A voluntary agreement between legally competent parties to do or refrain from doing something is known as:
a contract.
A voidable contract is one that is:
enforceable, but is subject to rescission by one of the parties.
When a seller’s lender allows a buyer to assume the seller’s existing mortgage and relieves the seller of any further liability for repayment of the loan, __________ has occurred.
a novation
A novation occurs when a new contract is formed by substituting a new party to a contract for an original party or a new obligation for an old one
To create a valid real estate contract, the acceptance of a written offer must be: (three items)
- within the time specified in the offer.
- in writing.
- delivered to the offeror.
The lawsuit filed to compel a seller to convey real property to a buyer under the terms of a valid contract is known as a suit for:
specific performance.
A contract that has been fully performed by all parties is known as:
an executed contract.
“This is the most beautiful landscaping I have ever seen” is an example of __________ .
puffing
The Statute of Frauds requires:
certain contracts to be in writing.
A written contract is:
an express contract.
The terms of a verbal real estate listing agreement between a seller and a real estate agent is enforceable when:
- the listing agent is the procuring cause of the sale.
- the sale of the home is closed in escrow.
- a ready, willing, and able buyer is found for the property by any party.
- None of the above
None of the above
A civil wrong causing damage to another is known as a __________ .
tort
A contract that has no force or effect in law is __________ .
void.
An offer to purchase property would NOT be terminated by?
The absence of earnest money
A counter offer terminates the original offer.
The offeror withdrawing the offer prior to acceptance automatically terminates the offer.
The death of the offeree prior to the offeree’s acceptance automatically terminates the offer.
Earnest money is not an element of a valid contract. Consideration is a valid element. In the case of an offer to purchase real estate, the consideration is the mutual promises of the buyer and seller. The offeror (buyer) agrees to purchase and the offeree (seller) agrees to sell.
