Chapter 8 - Real Estate Contract Law Flashcards
Bilateral Contract
A contract in which each party promises to do something.
Contract
An agreement to do or not to do a certain thing.
“A legally enforceable promise”
Express Contract
A contract that has been put into words, either spoken or written.
Implied Contract
An agreement that has not been put into words, but is implied by the actions of the parties.
Statute of Frauds
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.
Unilateral Contract
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.
Consideration
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.
List the 4 contract elements
- offer and acceptance
- consideration
- legal capacity
- legal purpose
Offer and Acceptance
The parties must have a meeting of the minds
1. Be clear in character
2. Accurately describe the property
3. Have and exact price
Consideration
Anything given or promised by a party to induce another to enter into a contract
Legal Capacity
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
Legal Purpose
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
Executed Contract
A contract in which both parties have completely performed their contractual obligations.
Executory Contract
A contract in which one or both parties have not yet completed performance of their obligations.
Valid
Having force, or binding force; legally sufficient and authorized by law.
Void
To have no force or effect; that which is unenforceable.
Voidable
That which is capable of being adjudged void, but is not void unless action is taken to make it so.
Time is of the Essence
A condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time.
Assignment
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.
Novation
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)
Liquidated Damages
A sum agreed upon by the parties to be full damages if a certain event occurs.
Rescission
The cancellation of a contract and restoration of the parties to the same position they held before the contract was entered into.
Specific Performance
An action to compel performance of an agreement, e.g., sale of land as an alternative to damages or rescission.
Statute of Limitations
A statute prescribing a period of limitations for the bringing of certain kinds of legal actions.
