Chapter Eleven Flashcards
a change to the existing content of a contract (i.e., if words or provisions are added to or deleted from the body of the contract). Must be initialed by all parties. 187
amendment
any provision added to an existing contract without altering the content of the original. Must be signed by all parties. 187
addendum
the transfer in writing of interest in a bond, mortgage, lease, or other instrument. 180
assignment
a legally enforceable promise or set of promises by which all parties to the instrument are legally bound to act as prescribed, that must be performed and for which if a breach of the promise occurs, the law provides a remedy. 176
bilateral contract
violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due. 180-181
breach of contract
1) that received by the grantor in exchange for his or her deed. 2) Something of value that induces a person to enter a contract. 178
consideration
a provision in a contract that requires a certain act to be done or a certain event to occur beofre the contract becomes binding. 186
contingency
a voluntary, legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. 176
contract
a new offer made in response to an offer received. It has the effect of rejecting the original the original offer, which cannot be accepted thereafter unless revived by the officer. 183
counteroffer
relevant information or facts that are known or should have been known. 50-51
disclosure
money deposited by a buyer under the terms of a contract, to be forfeited if the buyer defaults but to be applied to the purchase price if the sale is closed. 184
earnest money
the interest held by a vendee under a contract for deed or an installment contract; the right to obtain absolute ownership to property when legal title is held in another’s name. 184-185
equitable title
an agreement between a buyer, a seller, and an escrow holder setting forth rights and responsibilities of each. It is entered into when earnest money is deposited in a broker’s account for business. 184
escrow contract
a contract in which all parties have fulfilled their promises and thus performed the contract. 177
executed contract
a contract under which something remains to be done by one or more of the parties. 177
executory contract
an oral or written contract in which the parties state the contract’s terms and express their intentions in words. 47
express contract/express agreement
a contract under which the agreement of the parties is demonstrated by their acts and conduct. 47
implied agreement/implied contract
a transaction in which the sales price is paid in two or more installments over two or more years. If the sale meets certain requirements, a taxpayer can postpone reporting such income until future years by paying tax each year only on the proceeds received that year. 436
installment sale/land contract
an amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract. 185
liquidated damages
substituting a new obligation for an old one or substituting new parties to an existing obligation. 180
navation
two essential components of a valid contract; a “meeting of the minds.” 170
offer and acceptance
an agreement to keep open for a set period an offer to sell or purchase property. 187
option
the practice of one party canceling or terminating a contract, which has the effect of returning the parties to their original positions before the contract was made. 181
rescission
that part of a state law that requires certain instruments, such as deeds, real estate sales contracts, and certain leases, to be in writing to be legally enforceable. 194
statute of frauds
If the seller breaches a real estate sales contract, the buyer may sue, asking the court to force the seller to go through with the sale and convey the property as previously agreed. 181
suit for specific performance
A phrase in a contract that requires the performance of a certain act within a stated period of time. 180
time is of the essence
a contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. for example, an unsigned contract. 179
unenforceable contract
a one-sided contract wherein one party makes a promise so as to induce a second party to do something. The second party is not legally bound to perform; however, if the second party does comply, the first party is obligted to keep the promise. 177
unilateral contract
a contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it. 179
valid contract
a contract that has no legal force or effect because it does not meet the essential elements of a contract. 179
void contract
a contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties. 179
voidable contract
an agreement that may accompany an earnest money deposit for the purchase of real property as evidence of the purchaser’s good faith and intent to complete the transaction. 184
binder
