Contract Addenda, Performance and Termination Flashcards
When a change needs to be made to a Residential Contract, what is the best way to handle it?
Changes are never allowed.
Changes should be made using the “Amendment to Contract” addendum.
Write a new contract using novation.
Make the changes on the original contract.
Changes should be made using the “Amendment to Contract” addendum.
For which of the following reasons could a contract need to be changed?
For repairs
For financing
For termination of the option
All of the above
All of the above
What law requires any amendment or addenda used must be in writing and signed by both parties to be enforceable?
Real Estate License Act
Statute of Frauds
Texas Contract Law
The Uniform Standards Act of 1978
Statute of Frauds
Which of the following is the correct definition of the “Four Corners Doctrine”?
It is a doctrine used in court that allows an attorney to go to the “Four Corners of the Earth” to find proper evidence to aid his or her client.
The interpretation of any disputed clause in a contract will be influenced by the document as a whole.
The document is complete and nothing can be changed after acceptance.
This doctrine states that a person must sign or initial each page of a contract to demonstrate his or her understanding of the entire contract or the contract could become voidable.
The interpretation of any disputed clause in a contract will be influenced by the document as a whole.
What rule in contract cases prevents a party to a written contract from presenting oral evidence that contradicts or adds to the written terms of the contract that appears to be whole?
Rule of externalities
Statute of Frauds, Rule 17
Parol Evidence Rule
“Written First, Oral Second” rule
Parol Evidence Rule
How long is the Statute of Limitations for a written contract in Texas?
One year
Two years
Four years
Five years
4 Years
Oral is 2 Years
Which of the following items would need to be disclosed by a seller prior to selling his or her property?
Asbestos Lead-based paint Mold All of the above Next
All of the above
What repairs might be noted on the Texas Real Estate Commission Amendment to Contract?
Swimming pool has missing tiles that are to be replaced.
The sink in the main bathroom is cracked and is to be replaced.
Fix leaky pipe in the laundry room.
All of the above.
All of the above
How many amendments are allowed on a valid contract?
No more than two without a rewrite
Only one
Multiple
Amendments are not allowed after 10 days after acceptance.
Multiple
What might be a reason for the necessity to change the closing date of a contract?
The repairs will take longer than anticipated.
The seller needs more time to find another home.
The buyer cannot get out of his or her lease.
All of the above.
All of the above
Any time an addenda is attached to a contract, the box referencing that addendum
should be checked in paragraph 22 in most contracts.
Unlike addenda, which are additions to a contract, amendments are
specific changes to a contract agreed upon by both parties
Amendments do not replace the original contract
only the section stipulated by the amendment, and, by law under the Statute of Frauds, must be signed by both parties. Amendments only take place after the initial contract has been signed. Amendments should be numbered for the sake of clarity.
The Amendment to Contract form is frequently used when making amendments to a Residential Contract
particularly with regards to changes in the down payment, the loan amount(s), or the sales price. It is also used when there is a request of the seller to make additional repairs or changing the closing date, among others.
Performance is
the fulfillment of one’s obligations required by contract and may be demanded by a lawsuit.
Although contracts usually call for full and precise performance, a substantial performance may be acceptable under certain circumstances
on a pro rata basis, or on payment of damages for the unfinished or defective performance. The act of successful performance, as the other party reasonably understands the stipulated terms, discharges an individual from future contractual liability.
Part performance
entails the completion of a portion of what the contract stipulates
Specific performance
compels a party to execute an agreement to its terms where monetary damages would be inadequate compensation for breach of an agreement (this most frequently arises with the sale of land.)
Partial performance
is short of full performance spelled out in the contract, but if the contract provided for a series of acts or deliveries with payment for each of the series, there may be partial recovery for what has been performed or delivered even if there is not a full performance.
Both parties must live up to their end of the bargain in the contract to have closure
In other words, until both parties have properly performed under the contract, the contract remains open.
In disputed contract situations, judge will use what is called the “Four Corners Doctrine” to resolve disputed contracts.
Under this doctrine, the interpretation of any disputed clause will be influenced by the document as a whole and no phrase will be lifted out of the document to determine the meaning but will be looked at completely in its context
Parol Evidence Rule
prevents a party from presenting oral evidence that contradicts or adds to the written terms of contract.
Statute of Limitations
a law which states the length a time a person is allowed to bring a civil lawsuit. The time limits depend on a number of factors, including if a crime has been committed and the type of crime. As far as the breach of contract statue, the amount of time varies from state to state.
When both parties wish to liberate themselves from a contract, that is knows as
discharge
If a buyer or seller should breach a contract (meaning break a contract), the other party has three choices to remedy the situation:
Specific performance
Specific damages
Termination
Specific performance
The seller could sue the buyer for specific performance to try to get a judge agree that the buyer has to follow through with his agreement and purchase the property. Specific performance is when a judge requires one of the parties in a contract to fulfill the terms of the contract as agreed.
Specific damages
The seller could also sue for specific damages, which would be the expenses that the seller incurred because the buyer did not do what he agreed to do in the contract.
Termination
The seller could just terminate the contract. This option would require that the earnest money be released either to the buyer or the seller.
