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Fl Real Estate > Contracts > Flashcards

Contracts Flashcards

1
Q

Valid

A

Contract possessing the essential elements to be legally enforceable.

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2
Q

Unenforceable

A

Potentially valid contract lacking legal force.

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3
Q

Void

A

Invalid contract lacking legal effect from inception.

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4
Q

Voidable

A

Potentially valid contract wherein one or more parties have the right to rescind.

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5
Q

In a bilateral contract, what kind of obligations are created

A

Recipical

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6
Q

Executory Contract

A

One that has not been executed

A binding contract on multiple parties
One or more of the parties has yet to perform their contractual duties

The importance of the distinction between executory and executed contracts can be seen in the ability to bring a case to court.

to identify its stages of its existence

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7
Q

4 Legal Remedies for Breach of Contract

A

Specific performance

Rescission

Forfeiture (liquidated damages)

Suit for damages (compensatory damages)

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8
Q

Breach of Contract - Specific Performance (1 of 4)

A

Obligates and forces either party fulfill the contract as originally agreed.

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9
Q

Breach of Contract - Rescission (2of 4)

A

both parties terminate contract amicably as it it never occurred requires the return of any monies

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10
Q

Breach of Contract - Forfeiture (3 of 4)

A

forfeiture provides a way to terminate the contract relationship but with compensatory identified as liquidated damages

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11
Q

Breach of Contract - Suit for Damages
(4 of 4)

A

The party injured by the breach of contract can initiate a suit for damages.

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12
Q

Liquidated Damages

A

identified in contract as to what damages are to be paid in the event of breach of contract.

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13
Q

Compensatory Damages

A

award given to a wronged party as compensation for actual injury or loss.

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14
Q

Punitive Damages

A

breach of contract suits, except in cases of fraudulent misrepresentation

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15
Q

Elements of a Service Contract.
(listing or buyers broker agreement)

The Must-Haves:

A
  • Expiration Date.
  • Property description.
  • Listing Price & Terms.
  • Broker Compensation.
  • Principal signatures.
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16
Q

Elements of a Service Contract.
The Can’t-Haves:

A
  • Provision requiring cancellation notice in addition to expiration date.
  • Automatic renewal provisions.
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17
Q

Are Service contracts promulgated by the state?

A

NO meaning they don’t require you to use a specific contract and you can create your own.

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18
Q

procuring cause

A

is the individual or action(s) that brought a ready, willing, and able buyer to the transaction.

Action you did must prove it was the procuring cause that got buyer to purchase a property

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19
Q

Net Listings

A

broker is paid from remaining proceeds once closing costs and seller’s desired net amount are deducted

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20
Q

Exclusive Agency Listing

A

listing broker is only broker with a chance to earn commission but might not if seller procures the buyer

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21
Q

Exclusive right-of-sale listing

A

listing broker receives commission no matter what

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22
Q

Option contract

A

contract is unilateral Optionee Buyer agrees to pay Optionor (Seller) an amt to hold property The seller (Optionor) promises to sell property to Optionee. However Optionee buyer makes not promise and can cancel but loses his deposit.

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23
Q

What is the term for something of value that is deemed sufficient or appropriate for that which is offered in exchange?

A

consideration

24
Q

Installment Sales Contracts

A

Seller finances sale of property Also known as contract for deed
Buyer Gets Equitable Title Only. He does not hold title and Buyer does NOT get legal title prior to paying off the loan.
Can be the promise to do or do nothing.

25
Q

Addendum

A

introduction of new information to a contract prior to its being entered into

26
Q

Amendment

A

a change of information contained in an existing contract

27
Q

Contracts that you can NOT create

A

Deeds

Mortgages

Promissory notes

Lease agreements*

28
Q

four essential elements of a valid contract.

A

LOL C :)

L egally competent parties
O ffer and acceptance
L awful objective
C onsideration

29
Q

TRUE OR FALSE

unenforceable contracts can be fulfilled if both parties are willing. They just can’t be compelled (forced) to do so.

A

True

30
Q

parol evidence rule is

A

the legal concept that says that oral evidence can be used to support a written contract but can NOT be used to contradict one

31
Q

For Florida written contracts, the statute of limitations is how many years?

A

five years for contracts
four years for oral contracts
contracts for specific performance = 1 yr

32
Q

doctrine of laches

A

unreasonable delay or negligence in asserting or defending one’s rights can create a legal bar to equitable relief if a delay or negligence

Similar to statute of limitations

33
Q

Termination of an offer by Revocation

A

withdrawing the offer before acceptance has been communicated

34
Q

What is fair to assume when talking about the discharge of contracts

A

contract must be executory and valid

35
Q

force of law

A

is often used to underscore the legally compelling nature of the cause for the discharge of contracts

36
Q

operation of law

A

can be for a discharge that is purely administrative in nature.

37
Q

In what type of contract can a party potentially be exempted due to death or incapacity from their contractual obligations?

A

Personal Service Contracts

In real estate land, agency agreements (listing agreements and buyer representation agreements) are personal services contracts

but this is not always true as your agreement is between seller and brokerage not agent so contract could be re-assigned

38
Q

What is the primary point of differentiation between contracts that discharge due to acts of the parties as opposed to those that discharge due to an operation of law?

A

Discharge between parties requires an “action” between one of the parties while Discharge in the operation of law does not.

39
Q

Novation

A

is a mutual agreement of the parties to replace an existing contract with a new one

40
Q

Accord and Satisfaction

A

parties agree to discharge the original contract in favor of a new one, wherein accepted performance is often less than what was initially owed.

“We really wanted the original performance required of the old contract but will accept the performance of the new (lesser) promise.”

41
Q

Revocation and renunciation

A

Terminating agreement by which party

A principal revokes the agent’s authority to act on their behalf
Can also be the Seller in a Service agreement

An agent renounces

42
Q

A properly constructed contingency contract clause will contain the following information:

A

How to satisfy the contingency

Contingency performance deadlines

Liable parties for associated costs.

43
Q

Exclusive right-of-sale vs Exclusive Agency listing

A

Exclusive right-of-sale listing :
you will receive commission no matter who brings in the sale

Exclusive Agency listing:
the named listing broker is owed commission if the property is sold by anyone except if the owner procures sale.

44
Q

A protection period

A

is a limited time frame after an agreement ends where the broker may still be entitled to a commission if specified people that the broker had already shown the property return to purchase the property.

45
Q

Consent to Transition to Transaction Broker disclosure

A

Allows the broker to show all possible buyers the property without worrying about getting the form filled out in time if an in-house buyer materializes and wants to see the property right away.

46
Q

Buyer brokerage agreements are service contracts made between

A

Buyer and the Broker
not the sales associate

47
Q

All buyer brokerage agreements MUST have?

A

Expiration Date

48
Q

Net Sheet for Seller

A

gives your client a good estimate of what they can expect to walk away with after all closing costs are considered

49
Q

Clauses or paragraphs in a sales contract that address how conflicts and disputes will be handled between the parties

A

Dispute Resolution

Default
Attorney’s Fees;
Costs

50
Q

At what point does a buyer get “equitable title” to a property?

A

Once the buyer signs a binding sales contract, they enjoy what is known as equitable title, a non-ownership right that establishes the buyer’s financial interest in the property until closing, at which point becomes legal title for the buyer.

51
Q

What are the the minimal duties that are to be performed clearly indicate that ethical behavior is the expectation of a licensee.

A

D A D
Deal Honestly and fairly
Account for all funds
Disclose all known facts about property

52
Q

fraud breaks down into four essential elements:

A
  1. A purposeful misrepresentation of a material fact is made (which can include the concealment of fact).
  2. The individual making the misrepresentation does so knowingly; they clearly understand that it is false.
  3. Another party relies on that misrepresentation.
  4. The party suffers actual loss as a result
53
Q

informal contract

A

a parole contract (verbal) not under seal difficult to enforce

54
Q

3 disclosures required in FL Sales contracts

A

Radon exposure
Lead paint
Flood Insurance

55
Q
A

Fl Real Estate (16 decks)

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