contracts Flashcards
Expressed Contract
An expressed contract can either be an oral contract or a written contract
Implied Contract
An implied contract is created by the actions of the parties Example: If you eat the food in a restaurant, you must pay for it. This is an implied contract
Bilateral Contract
A promise for a promise (real estate purchase contracts)
Unilateral Contract
A promise for performance. It does not need the other person’s promise. A salesperson has a unilateral contract with the employing broker. If you perform I will “pay,” but I cannot make you perform
Executed Contract
A contract that has been fully performed
Executory Contract
A contract not yet fully performed
Forbearance
A promise not to act if you promise to do something. Example: I promise not to sell if you give me $500.
Novation
Substituted new contract for old. Example: Assume an existing loan that releases the first borrower from liability.
Default: Remedies for a breach of contract
Specific Performance and/or Damages
Liquidated Damages
Unilateral Rescission
Mutual Rescission
Specific Performance and/or Damages
Both parties may force the other to perform or sue in court for damages or both
Liquidated Damages
Contract creates an agreement in advance that earnest money is forfeited if buyer reneges. This is the sole remedy of the seller
Unilateral Rescission
No damages. The defaulting party does not act to enforce or sue
Mutual Rescission
No damages. Both parties decide not to perform by agreement
Statute of limitations
3-7 years depending on the type of contract.
Earnest Money Contract
(Good and valuable consideration): Notes, checks, rubies, are given with the contract to show good intentions
Installment Land Contract (Contract for Deed):
Buyer makes periodic payments to the seller. When payments are completed, title is transferred
Buyer becomes owner of the land in equity, and the buyer is said to have “equitable title” while the seller still retains legal title
In many states, if one payment is missed the buyer loses all his or her rights to complete his purchase
Truth-in-Lending
A body of federal law implemented by the Federal Reserve Board’s Regulation Z, the main purpose is to ensure customers are given meaningful information with respect to the cost of credit so they can compare credit terms available to them. The finance charge and annual percentage rate (APR) are the two most important disclosures required.
reformation
An action to correct a mistake in an agreement or a deed
optionor
property owner
