Contracting

Question 1

Statute of fraud requires

Answer 1

Certain types of contracts must be in writing to be legally enforcible

Question 2

Requirements for a valid contract (5)

Answer 2

Offer and acceptance
Consideration
Legally competent parties
Legal purpose
Made voluntarily

Question 3

Severability in regard to contracts

Answer 3

The concept that if a court deems a term in the contract to be unenforceable, the remainder of the contract remains enforceable.

Question 4

Voidable Contract

Answer 4

Appears valid, but one or both parties have a legal right to disaffirm it. This could be because
one of the parties lacks legal competence, or because there was a mistake or misrepresentation, causing a failure of reality in consent. The contract is voidable by the incompetent or misled party but enforceable against the other party.

Question 5

Void Contract

Answer 5

A void contract isn’t a contract at all because it lacks one or more of the requirements for a valid contract. It has no legal force or effect; it’s unenforceable

Question 6

time is of the essence

Answer 6

All parties must comply with contract terms in a timely manner; means that both parties faithfully agree to perform responsibilities within the time limits of
the contract.

Question 7

executed contract

Answer 7

An executed contract is one in which all parties to a contract have met all contract term. A contract for the sale of real estate is executed by the delivery and acceptance of the deed and the payment of the purchase price. (Note that you may also see the
term “executed” used to refer a document that’s been signed.)

Question 8

Executory contract

Answer 8

Contracts are executory until all of the promises in the contract have been completed. A contract for the sale of real estate is executory until the deed is delivered and accepted.

Question 9

notices clause

Answer 9

Contract clause that describes how contract-related notice may be made and when notice is
considered to have been received.

Question 10

unilateral rescission of a contract

Answer 10

When a breach occurs, the innocent party may unilaterally terminate the contract.

Question 11

Partial performance

Answer 11

When one party meets some, but not all, of the terms of the contract. The innocent party may agree to accept partial performance, perhaps in return for some sort of compensation.

Question 12

specific performance

Answer 12

specific performance suit seeks to force a party to make good on the promises made in some way.

Question 13

Contract discharge

Answer 13

Aka performance, execution): all the parties have met all contract terms and are discharged from their contractual obligations

Question 14

Contract rescission

Answer 14

(cancellation) generally results from an operation of law, such as breach of contract, destruction of the
object of the contract,

Question 15

Novation

Answer 15

when one contract is substituted for another.

Question 16

bilateral contract v unilateral contract

Answer 16

Bilateral contract–both parties have obligations.

Unilateral contract–only one party makes a promise, such as an option contract.

Question 17

Choice of law clause

Answer 17

Specifies that any dispute arising under the contract shall be determined in accordance with the law in a particular jurisdiction.

Question 18

Indemnification clause

Answer 18

Means one or both parties commit to compensate the other for any harm, liability, or loss arising out of the contract.

Question 19

Arbitration clause

Answer 19

An arbitration clause requires the parties to resolve or attempt to resolve their disputes through an arbitration process.

Question 20

Mediation Clause

Answer 20

A mediation clause requires the parties to attempt mediation prior to engaging in arbitration or a legal action

Question 21

The difference between an addendum and an amendment to a contract

Answer 21

An addendum adds terms not address in main contact, such as adding repairs post inspection.

An amendment changes terms: closing date change; change in conveyances, price change.