Chapter 8 Flashcards
Which of the following is considered a legal description of a property?
Answer: A metes and bounds description
What is the most common way for contracts to discharge?
Answer: Full performance
A party may be able to discharge a contract on grounds of impossibility if the object of the contract has been destroyed, and…?
Answer: The party had nothing to do with the destruction.
When is the doctrine of impossibility most often applied?
Answer: When the property that is the object of a contract is destroyed or rendered unusable
If a contract contains a force majeure provision, and an accident destroys the object of the contract, which of the following is most likely to govern the discharge of the contract?
Answer: The force majeure provision
Wilbert sells imported truffle snouts, and Floyd supplies them. Wilbert and Floyd enter into a truffle snouts supply contract, under which Floyd agrees to deliver 1,000 truffle snouts to Wilbert each week. The domestic market for truffle snouts crashes, and the availability of imported truffle snouts falls off rapidly due to truffle snout shortages abroad. Which of the following is the most likely method of discharge for this contract?
Answer: Agreement of the parties
………… is when a court orders a person to do or not do a certain action.
Answer: An injunction
………… is when the court interprets a poorly written contract to find the parties’ intentions and issues an order clarifying the parties’ respective obligations under the contract.
Answer: Reformation
………… is when the court places the parties in the same position they were prior to making the contract and discharges the contract.
Answer: Rescission
A court is most likely to award specific performance in a contract involving…?
Answer: real estate sales.
In ………… agreement, a real estate agent does not need to worry about competition from other agents.
Answer: An exclusive right to sell listing
Max is a newly licensed real estate agent. He gets a position with a brokerage firm that plans to pay him commissions, not a salary. What kind of contract might Max want to make with his new firm?
Answer: An independent contractor agreement
Which of the following is usually not mentioned in a sales contract?
Answer: Rent
If a seller would like an agent’s sales help, but wants to avoid paying a commission if the seller finds the buyer, what kind of listing agreement should the seller avoid?
Answer: An exclusive right to sell listing
Which of the following is not necessary for an agent to be considered a “statutory nonemployee” of a brokerage firm?
Answer: An independent contractor’s license
Which is NOT an essential element of a contract?
Answer: Time is of the essence clause
Tanya says to Gina, “Would you like to but my house for $300,000?” Gina says, “I can’t afford that. Would you take $260,000.” Tanya says, “OK.” This is an example of:
Answer: All of the answer choices provided are correct
The essential elements of a contract include offer and acceptance, consideration, legal capacity, and…?
Answer: Legal purpose
Tom walks up to Teresa and says, “Would you like to buy my house for $250,000, with a closing to occur on the first Friday of next month?” This is an example of…?
Answer: an offer.
The legal detriment test is a test for consideration. Under this test, consideration exists if…?
Answer: a party agrees to give up a legal right they have in exchange for something.
Willie offers to sell his house to Leopold for $100,000. Leopold says he is interested but unsure. He offers Willie $200 to hold the offer open for three weeks to let him think about it. Willie agrees and takes the $200. Which phrase best describes Willie and Leopold’s deal?
Answer: An options contract
Which contract is enforceable?
Answer: A contract to demolish a building belonging to one of the parties.
Which is required for a valid contract?
Answer: The free and willing acceptance of both parties
If a person makes an offer in jest, does an acceptance create a valid contract?
Answer: No. An offer must be made with an intent to create a legally binding contract.
Which of the following is a legal effect of a valid contract?
Answer: The parties acquire a duty to perform in good faith.
The duty to perform in good faith is…?
Answer: consistent with our expectations when we make a contract.
Which agreement is most likely to be illegal?
Answer: A net listing agreement
When a court interprets a contract, the court tries to find…?
Answer: the intent of the parties.
Brenda and Lucinda enter into a real estate sales contract for Brenda’s property, which states, “this sales contract is for Brenda’s property and all the structures on it.” A mobile home is parked on Brenda’s property. Lucinda believes their deal includes the mobile home as well as the land. Brenda says it doesn’t. Which of the following steps should Lucinda take to resolve this conflict?
Answer: Ask a court to interpret the contract.
A contract for an illegal purpose can be called…?
Answer: a void contract.