Contracts and Contracts Law Flashcards
What are five elements of a Valid Contract
Offer and Acceptance
Consideration
Legally competent parties
Legal Purpose
When is offer and Acceptance occur?
when parties enter into agreement fully comprehending the contrat’s terms
What does Legal Purpose mean?
in order for contract to be valid, it’s purpose must comply with the law
In a purchase offer, is earnest money required in order to have a binding contract?
No, because the buyer’s consideration is the promise to buy
What does Implied means?
relies upon parties’ actions and words to determine the agreement
If your aunt asks your sister to pain her house and pays her 1000 dollars, asks your brother to plant her garden and pays him 1000 dollars and then asks you to build her a deck and doesn’t pay you, t his would feel like a breach of which type of contract?
Implied
What is Expressed contract?
Oral or written; clearly states agreement terms between parties
What is bilateral contract?
both parties have obligations
What is Unilateral contract?
only one party makes a promise
Executed means?
when parties completed terms of contract
Executory means?
one in which something remains to be done by one or more parties.
but are considered valid contracts
Is it accurate to say, that if contract is fully signed by the parties is sometimes know as excecated, though it’s not legally executed until all terms are fulfilled?
True
What is Breach of contract?
when one party fails to meet the obligations of the contract
What does Valid mean?
contains all essential elements
Invalid means?
missing an essential element
Voidable means?
one or both parties have the option to void the contract.
two intoxicated co-workers sign a contract in which they agree to marry each other if they’re both still single when they reach age 40. Which of the following is true about this contract?
This is a voidable contract because the parties were intoxicated at the time they signed it
What is unenforceable contract?
won’t stand in court
What is enforceable contract?
will stand in court
What are real estate professionals called in real estate contract?
intermediaries
What element are required to be in contract provision?
Property description
Terms of the parties agreement
Purchase price and earnest money info
Parties signatures
Fixture and personal property (inclusion and exclusion)
Financing info, including appraisal contingency
Title and escrow info
property disclosure
Warranties
Due diligence information, including inspection contingency
Breach of contract remedies (set right)
What is cure Period?
gives the party 3 days grace period to cure any non compliance issues
What is the written notification used in cure period called?
three day cure notice
True or False? Contract deadline extensions are in writing and signed by all parties.
True
Statues of Frauds is addressed in which AZ department?
Arizona Revised Statute ( ARS)
What does Statues of Frauds state?
it states that one contracting party has no legal recourse against another party believed to have breacheda contract unless the contract is in writing, clearly identifies the parties and the contract’s subject matter, lays out the contract essential terms and conditions and is signed by the parties to be charged with the contract.
What must be met for the contract to be fully executed and enforceable
contingencies
what three elements must be accomplished to remove a contingency?
action needed to remove condition
deadline for it’s removal
party responsible for the action and cost involved
What are comment contingencies to purchase contracts include?
loan
appraisal
inspection
insurance
What is the purpose of mortgage loan contingency
protects buyers earnest money, if unable to obtain financing
What is performance?
is when all contract terms have been met
Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained the gutters leaked and flooded Betty’s basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of
Breach of contract
The ___________gives the holder the right to purchase a property if the owner decides to sell
Right of first refusal
Which act is designed to give electronic signatures records and contracts legal recognition equal to that of paper?
The Federal Uniform Electronic transaction Act ( UETA)
Equitable interest
is the right to obtain full legal property title at some future date
Swede is the vendor in a contract for deed arrangement. The vendee is not making his monthly payments. What is the process Swede can use to reclaim equitable title of property?
Termination
What is assignment of a contract?
is the substitution of one party for another, with the original party still being obligated under the terms of the contract
What doe POA do?
Gives one party the authority to act on behalf of another party
Thaddeus submitted an offer to purchase Trinity’s home with appraisal, loan, and inspection contingencies. He failed to meet one of the contingencies. Which of these is true?
Trinity has the option of either continuing with or terminating the contract.
The injured party (in this case, Trinity) may choose to terminate a contract based on an unfulfilled contingency.
What type of contract do you have once the seller has accepted the buyer’s offer in writing and the buyer has been notified of the acceptance?
Enforceable
Assuming this contract contains all of the essential elements of a valid contract, it’s an enforceable contract that will stand up in court because it has legal effect or force.
Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?
The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease’s terms.
Peggy signed an offer to purchase Myrtle’s house, and Myrtle accepted. Peggy filed for bankruptcy before the contract was executed. Which of these statements best describes what happens now?
The contract will terminate by operation of law.
Contracts may terminate by operation of law, including in a case of bankruptcy or destruction of the property.
what does Void mean?
totally unenforceable and probably lacked legal effect from the beginning.
Tricia wrote an offer to purchase Ziggy’s vacant lot. She intended to borrow $55,000 of the $95,000 purchase price at an interest rate of 5.75%. She applied for the loan but wouldn’t cooperate with the lender to provide the required documentation. Tricia subsequently used the loan contingency to terminate the contract. Which of these is true?
Tricia failed to act in good faith to try to get her loan, so she’s in breach of contract.
Buyers must act in good faith to meet contract terms, including contingencies, or they risk losing their earnest money.
what is consideration in real estate?
a promise, performance, or forbearance bargained by a promisor in exchange for their promise.
In which of these situations might an Arizona Multiple Counter Offer form be used?
The Multiple Counter Offer form is used when a seller has received several offers on a property and wishes to either request a highest and best offer from all buyers or to dictate specific terms that he’ll accept.
The Nettles have accepted the Briars’ purchase offer, and both parties have signed the sales contract. The funds, and the title, should transfer in a matter of days, but otherwise all elements and terms of the contract have been met. What type of contract do the Nettles and the Briars have?
Executory
The Nettles and Briars have a valid contract that’s in the process of being completed. Because one or more terms of the contract must still be completed, they have an executory contract.
is this a unilateral contract statement?
Sherry promises to give Brent a ride home from work, and then doesn’t show up.
yes
A promise is a unilateral contract if there’s no reciprocal promise. Breaching a contract in which one party performs isn’t a unilateral contract.
what is revocation?
When a person or a business making an offer decides to nullify that decision before it is accepted.
What is legal covenant?
an agreement between two or more parties regarding certain use of a piece of real property.
what is boilerplate purchase contract
The assignor is prohibited from making a profit by selling the right to purchase to an assignee.
False
In some cases, the assignor may actually make a profit by selling the right to purchase to an assignee.
You receive an offer in the mail that says you’re eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this?
Unenforceable contract
A sweepstakes entry is a unilateral contract because only the sweepstakes administrator is obligated to perform any action; the recipient of the offer is not contractually bound to enter the contest.
