Chapter 8 - Real Estate Contract Law

Question 1

Bilateral Contract

Answer 1

A contract in which each party promises to do something.

Question 2

Contract

Answer 2

An agreement to do or not to do a certain thing.
“A legally enforceable promise”

Question 3

Express Contract

Answer 3

A contract that has been put into words, either spoken or written.

Question 4

Implied Contract

Answer 4

An agreement that has not been put into words, but is implied by the actions of the parties.

Question 5

Statute of Frauds

Answer 5

A state law, based on an old English statute, requiring certain contracts to be in writing and signed before they will be enforceable at law, e.g.. contracts for the sale of real property, contracts that are not performed within one year.

Question 6

Unilateral Contract

Answer 6

A contract in which one party promises to do something if the other party performs a certain act, but the other party does not promise to perform it; the contract is formed only if the other party does perform the requested act.

Question 7

Consideration

Answer 7

Anything given or promised by a party to induce another to enter into a contract, such as money, personal services, or a promise not to do something.

Question 8

List the 4 contract elements

Answer 8

1. offer and acceptance
2. consideration
3. legal capacity
4. legal purpose

Question 9

Offer and Acceptance

Answer 9

The parties must have a meeting of the minds
1. Be clear in character
2. Accurately describe the property
3. Have and exact price

Question 10

Consideration

Answer 10

Anything given or promised by a party to induce another to enter into a contract

Question 11

Legal Capacity

Answer 11

All parties must have the legal capacity to enter into a contract
1. Persons action on behalf of a corporation
2. Power of Attorney
3. Fiduciary given the authority to contract
4. Emancipated minor

Question 12

Legal Purpose

Answer 12

The contract must have a lawful objective
1. To commit a crime, a tort or a fraud
2. To promote corruption in public life
3. To harm public safety

Question 13

Executed Contract

Answer 13

A contract in which both parties have completely performed their contractual obligations.

Question 14

Executory Contract

Answer 14

A contract in which one or both parties have not yet completed performance of their obligations.

Question 15

Valid

Answer 15

Having force, or binding force; legally sufficient and authorized by law.

Question 16

Void

Answer 16

To have no force or effect; that which is unenforceable.

Question 17

Voidable

Answer 17

That which is capable of being adjudged void, but is not void unless action is taken to make it so.

Question 18

Time is of the Essence

Answer 18

A condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time.

Question 19

Assignment

Answer 19

A transfer to another of any property in possession or in action, or of any estate or right therein. A transfer by a person of that person’s rights under a contract.

Question 20

Novation

Answer 20

The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties. (Ex. Taking over a mortgage)

Question 21

Liquidated Damages

Answer 21

A sum agreed upon by the parties to be full damages if a certain event occurs.

Question 22

Rescission

Answer 22

The cancellation of a contract and restoration of the parties to the same position they held before the contract was entered into.

Question 23

Specific Performance

Answer 23

An action to compel performance of an agreement, e.g., sale of land as an alternative to damages or rescission.

Question 24

Statute of Limitations

Answer 24

A statute prescribing a period of limitations for the bringing of certain kinds of legal actions.