Contracts

Question 1

True or False:
The statute of frauds allows real estate contracts to be verbal - and verbal contracts are enforceable in court, so long as they include the requirements for a valid contract.

Answer 1

False, real estate contracts must be written

Question 2

What are the 5 parts of a legal real estate contract?

Answer 2

offer and acceptance

consideration

legally competent parties

legal purpose

voluntary contract

Question 3

Define contract severability

Answer 3

the ability for a court to deem only one part of a contract void, and enforce the rest

Question 4

What is the difference between an executed contract - and a contract that is executory

Answer 4

an executed contract has been completed, and executory contract means that not all terms have been completed yet.

Question 5

When one party of a contract breaches that contract, the innocent party may unilaterally terminate the contract. This is known as ____

Answer 5

unilateral recission

Question 6

What are the two types of performace breaches in a contract and how are they resolved?

Answer 6

Partial performance - one party fulfills some, but not all of the terms of the contract. The other party may agree to concessions or payment.

Specific performance - a law suit in which a party attempts to force the other party to make good on the promises in some way

Question 7

When one party agrees in writing that the other party is no longer held to the provisions of the agreement, this is known as a _____

Answer 7

release

Question 8

When one party chooses to end a contract due to a breach by the other party, the contract termination is known as ____

Answer 8

rescission

Question 9

A contract terminated through mutual written release is known as _____

Answer 9

mutual agreement

Question 10

When contractual obligations are transferred to a new party, this is known as ____

Answer 10

assignment

Question 11

In an options contract, the two parties are known as ____

Answer 11

optionee and optionor

Question 12

Earnest money is decided by ____

Answer 12

negotiation between the buyer and seller

Question 13

When the closing date needs to be changed in a contract, that change is made through a

Answer 13

amendment

Question 14

Define an escalator offer on a house

Answer 14

a buyer’s offer to top any existing offer by a certain amount, up to a specified cap