Contracts Flashcards
What are the essential elements of a contract?
- Competent parties
- Legality of purpose
- Offer
- Acceptance
- Consideration
- Written contracts
- Communication
Competent parties
A client who is mentally able and understands the contract. Also above 18.
Legality of purpose
To be enforceable the contract must have a legal purpose.
Not enforceable if it is two people who sign a illegal contract, like wanting to rob a bank.
Not legal!
In what ways can an offer terminate?
- revocation
- counteroffer
- rejection
- Time
- death of either parties
Revocation
The offeror can revoke the offer any time before it is accepted.
Executory
Means still have things that need to be done under the contract.
After closing is when it becomes executed
Bilateral and unilateral
Bilateral = contract
exchange of promises of property between two people.
Unilateral-
a promise to do something. Like mow someone’s lawn. We as buyer agents get paid by unilateral contract.
Implied
By eating at a restaurant you have implied that you will pay after your meal. Through actions
Expressed
The parties all agree in writing or orally to the terms of the contract.
Valid
Includes all the essential elements, it is enforceable in court because it is, in every way.
Void
Is one that may appear to be proper but is not.
Missing an element that makes it not a legal contract.
Voidable
One or both parties has the option to rescind the contract.
Like fraud, misrepresentation, undue influence, duress or age.
Enforceable and unenforceable
Enforceable - either party could get a lawyer and go to court to force the other party to
- Comply with the agreement
- Pay damages for breach of contract
Unenforceable - void, voidable doesn’t comply with the contract.
Who still owns the property the day of closing. ?
The seller until the papers are signed.
Can you change the loaner on a p&s after it is signed?
No. Unless the seller agrees.
Radon air Make sure to ask in the contingency ..
Wether you want the whole home system done or just the point of entry.
How to figure out fuel prorations
Multiply the fuel cost by 365 times the number of days the seller has been there since their last payment. Same with taxes.
Default
Failure to fulfill promises
Liquidated damages
Provides that the defaulting party will pay the other pre agreed sun of money to cover the losses of the non defaulting party. The agreed sum is called the liquidated damages.
Equitable title
being under contract. Buyer does but have legal title to the property cause he has not closed. But he dies have equitable title, the right to buy.
If the seller dies during a contract will the property still close?
Yes. The buyers still have the right to buy the property and close on it.
Notice
Imputation of knowledge. If you communicated with the licensee, you’ve communicated with the client.
Compensation agreement
An addendum for a licensee to get paid for a sale by owner. FSBO
Kick out clause
Seller accepts a buyers offer to purchase contingent upon selling the buyers property. Seller can still lockout buyers if their under contract. Seller still markets his property while under contract.
Right of first refusal
Contract with a seller that if he ever sells his house the interested party to be asked first.
Option contract
Used by developers
Under contract the seller agrees to take the property off the market for a period of time while the buyer researches the property.
Time is of the essence
In SOME p&s , and if so it means that the date of the closing is crucial. Closing must take place on the date set forth or there is a breech in the contract.
