Contracts

Question 1

Acceptance

Answer 1

Agreement or consent to the terms of an offer, establishing “the meeting of the minds” that is essential to a contract.

Question 2

Accord & Satisfaction

Answer 2

A compromise under which one party meets part of his or her obligations while the other party relieve him or her of the need to meet the rest.

Question 3

Assignee

Answer 3

One to whom property, an interest in property, or contractual rights is transferred.

Question 4

Assignment

Answer 4

The transfer of property or rights to another.

Question 5

Backup Offer

Answer 5

A purchase offer excepted by seller that will become active if a prior offer falls through.

Question 6

Clause, Automatic Extension

Answer 6

Provision that at least will renew automatically under its original terms unless one party notifies the other changes.

Question 7

Clause, Escalator

Answer 7

A condition in a contract that permits terms to be adjusted upward or downward in the event of certain contingencies, usually tied to an index or event. Often used in long term leases to allow rent adjustments when taxes or maintenance cost increase.

Question 8

Clause, Hold-Harmless (also: Exculpatory Clause)

Answer 8

A provision that releases the landlord from any liability, regardless of his or her negligence, in connection with damage to a tenant’s property or business as a result of an insurable casualty. Also called an exculpatory clause.

Question 9

Clause, Nondisturbance

Answer 9

A stipulation that foreclosure of a previous mortgage does not terminate a lease.

Question 10

Clause, Protection (also: Carryover, Extender, or Safety Clause)

Answer 10

A requirement that a broker is entitled to a commission if, within a specified time after a listing expires, the property is sold to someone who became aware of it due to the broker’s actions during the listing period. (e.g., the broker showed it to the eventual buyer) Also called a carryover, extender, or safety clause.

Question 11

Clause, Recapture

Answer 11

A condition that permits termination of the lease if the tenant does not realize a specified level of business.

Question 12

Coercion (also: Duress)

Answer 12

The act of forcing a person to do something against his or her will. Also called duress.

Question 13

Compensatory Damages

Answer 13

An amount determined by a court or arbitrator to be the actual loss suffered as a result of breach of contract.

Question 14

Consideration

Answer 14

Anything given by one party — for example, property, personal services, money — to induce another to enter into a contract.

Question 15

Constructive Eviction

Answer 15

A landlord’s actions of failure to act that caused a tenant to vacate the property because it’s dangerous or uninhabitable.

Question 16

Contingency

Answer 16

A provision that requires completion of a certain act before the contract is binding.

Question 17

Contract

Answer 17

An agreement that has four essential parts:

parties capable of entering into a contract, consent of the parties, a lawful object of purpose, and consideration.

If the contract is for the sale of real property, it must also be in writing and signed.

Question 18

Contract, Bilateral

Answer 18

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Question 19

Contract, Capacity

Answer 19

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Question 20

Contract, Executed

Answer 20

A condition in which both parties to the contract have fully satisfied its terms.

Question 21

Contract, Executory

Answer 21

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Question 22

Contract, Express

Answer 22

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Question 23

Contract, Implied

Answer 23

An agreement that results from the actions, rather than the words, of the parties.

Question 24

Contract, Unilateral

Answer 24

A pact obligating only one party.

Question 25

Contract, Valid

Answer 25

An accord that contains all the essential elements and is binding and enforceable upon both parties.

Question 26

Contract, Void

Answer 26

An agreement that has no force or or effect because it’s missing one more essential elements.

Question 27

Contract, Voidable

Answer 27

An agreement that is enforceable but subject to rescission by one party.

Question 28

Corporate Resolution

Answer 28

The document authorize a specific people to legally sign for the corporation.

Question 29

Counteroffer

Answer 29

Any change by the seller in a buyer’s written offer.

Question 30

Damages

Answer 30

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Question 31

Duress

Answer 31

Unlawful constraint to force another person to do something against his or her will.

Question 32

Earnest Money

Answer 32

A deposit by a purchaser of a real estate as evidence of good faith. (It does not constitute the buyers consideration for the contract.)

Question 33

Exclusive Right to Sell

Answer 33

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Question 34

Execute

Answer 34

To sign; to perform.

Question 35

Expansion Option

Answer 35

An opportunity for the lessee to expand the amount of space leased.