Contracts Flashcards
Legal essentials of a contract are (CMLC)
Capable parties, mutual consent, lawful objection, consideration
A valid contract is
Has all legal essentials
A void contract is
If missing even one essential, underage party, illegal consideration
A consideration is
Valuable, good, sufficient, adequate
What is a novation
One party or obligation substituted for another
Whats in a contingency
Nature, duration, method removed
What type of contracts do not need to be in writing
Personal property listing or lease for 1 year or less
A party able to enter into a contract
An emancipated minor
What does it mean when a mutual consent in real estate contracts
Offer and acceptance
What describes a cloud mutual consent
Misrepresentation, threats, duress
A voidable contract describes as
Binding until rescinded, not illegal purpose, fraud, misrepresentation
Actual fraud is described as intent to
Intent to deceive
Constructive fraud is
Negligence
If buyer loses ability to complete the purchase
The contract is unenforceable
In a purchase contract (offer to purchase) when is the effective date
Final acceptance delivers to offeror, when all parties signed
In a breach of the purchase contract, the buyer can sue seller within
Within 4 years
If a purchase contract is signed by only 1 spouse
It is unenforceable
In a purchase contract, what does “As Is” represent
Seller not willing to make repairs. Only includes observable conditions.
If seller backs out, what can the buyer do
Buyer (not broker) sues for specific performance
On owner occupied, liquidated damages cannot generally exceed coverage of
3% of purchase price
When do you receive copy of signed purchase contract
At time of signing
Purchase contract contains what aspect of time
Time is of the essence
Where does the contingency removal clause exist
In purchase contracts
What is a counteroffer
Rejection of original offer and a new one
Multiple counteroffers must be
Must be disclosed
Listings are defined as what type of contract
Bilateral employment contract
Who are involved in a listing
Competent parties
In a listing agreement, the commission clause must be in
10 point font in bold
If a salesperson leaves broker, what happens to the listing
Listing stays with broker
In an exclusive listing, it must have
Must have definite termination date
An example of definite termination date for an exclusive listing is
90 days from signing
In a residential listing agreement (seller reserved) if the owner sells (brings buyer)
No commission is owed
In an exclusive right to sell, if the property sells
Pay commission
In an open listing, if there are multiple brokers, who gets paid
The procuring cause gets paid
In a net listing, owner nets his proceeds when
Before broker gets paid
Describe the protection period clause in a listing agreement
Broker gets paid based on what happens after listing expires
Where does the authority for broker to get paid get stated?
In the listing and must be in writing
What protects from false information from seller
Hold harmless clause
What describes leases
Rights of possession for paying rent
When can you sublease or assign
If lease does not prohibit it
Unwritten lease for more than a year is
Unenforceable
Lessee who didn’t sign lease is what type of contract
Implied contract
What’s a percentage lease in retail
Percentage of gross sales
Maximum term for agricultural lease is
51 years
In a net lease, tenant pays
Tenant pays fixed and variable expense
If landlord does not maintain property
Tenants released by constructive eviction
What is the agreement when you surrender
Agreement to terminate lease early
What is an abandonment
Tenant vacates early
What is estate of sufferance
Tenant stays after lease expires
If the principal cancels before listing expires, principal could owe
Could owe 2 commissions
If no written agreement, payment of commission can still be
Payment of commission permissible
If no written extension of listing and it expires, what happens to the commission
Quite probably no commission
Purchase of time share interests can be rescinded in how many days
Rescind in 7 days
What is an example of unilateral contract
Options
When a buyer is in an option contract
Optionee (buyer) is not bound to perform
If seller is in an option contract
Optionor (seller) must sell to optionee
In an unilateral contract, options and listing
Must disclose all
In an advance fee contract, broker cannot
Cannot guarantee transaction
For an advanced fee contract, how many days must you submit materials to commissioner
Not less than 10 days before publication
A contract that is not to be performed within 1 year must be in writing is in which legal doctrine
Statute of frauds
