Contracts and Contracts Law

Question 1

What are five elements of a Valid Contract

Answer 1

Offer and Acceptance
Consideration
Legally competent parties
Legal Purpose

Question 2

When is offer and Acceptance occur?

Answer 2

when parties enter into agreement fully comprehending the contrat’s terms

Question 3

What does Legal Purpose mean?

Answer 3

in order for contract to be valid, it’s purpose must comply with the law

Question 4

In a purchase offer, is earnest money required in order to have a binding contract?

Answer 4

No, because the buyer’s consideration is the promise to buy

Question 5

What does Implied means?

Answer 5

relies upon parties’ actions and words to determine the agreement

Question 6

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?

Answer 6

Implied

Question 7

What is Expressed contract?

Answer 7

Oral or written; clearly states agreement terms between parties

Question 8

What is bilateral contract?

Answer 8

both parties have obligations

Question 9

What is Unilateral contract?

Answer 9

only one party makes a promise

Question 10

Executed means?

Answer 10

when parties completed terms of contract

Question 11

Executory means?

Answer 11

one in which something remains to be done by one or more parties.
but are considered valid contracts

Question 12

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?

Answer 12

True

Question 13

What is Breach of contract?

Answer 13

when one party fails to meet the obligations of the contract

Question 14

What does Valid mean?

Answer 14

contains all essential elements

Question 15

Invalid means?

Answer 15

missing an essential element

Question 16

Voidable means?

Answer 16

one or both parties have the option to void the contract.

Question 17

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?

Answer 17

This is a voidable contract because the parties were intoxicated at the time they signed it

Question 18

What is unenforceable contract?

Answer 18

won’t stand in court

Question 19

What is enforceable contract?

Answer 19

will stand in court

Question 20

What are real estate professionals called in real estate contract?

Answer 20

intermediaries

Question 21

What element are required to be in contract provision?

Answer 21

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)

Question 22

What is cure Period?

Answer 22

gives the party 3 days grace period to cure any non compliance issues

Question 23

What is the written notification used in cure period called?

Answer 23

three day cure notice

Question 24

True or False? Contract deadline extensions are in writing and signed by all parties.

Answer 24

True

Question 25

Statues of Frauds is addressed in which AZ department?

Answer 25

Arizona Revised Statute ( ARS)

Question 26

What does Statues of Frauds state?

Answer 26

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.

Question 27

What must be met for the contract to be fully executed and enforceable

Answer 27

contingencies

Question 28

what three elements must be accomplished to remove a contingency?

Answer 28

action needed to remove condition
deadline for it’s removal
party responsible for the action and cost involved

Question 29

What are comment contingencies to purchase contracts include?

Answer 29

loan
appraisal
inspection
insurance

Question 30

What is the purpose of mortgage loan contingency

Answer 30

protects buyers earnest money, if unable to obtain financing

Question 31

What is performance?

Answer 31

is when all contract terms have been met

Question 32

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

Answer 32

Breach of contract

Question 33

The ___________gives the holder the right to purchase a property if the owner decides to sell

Answer 33

Right of first refusal

Question 34

Which act is designed to give electronic signatures records and contracts legal recognition equal to that of paper?

Answer 34

The Federal Uniform Electronic transaction Act ( UETA)

Question 35

Equitable interest

Answer 35

is the right to obtain full legal property title at some future date

Question 36

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?

Answer 36

Termination

Question 37

What is assignment of a contract?

Answer 37

is the substitution of one party for another, with the original party still being obligated under the terms of the contract

Question 38

What doe POA do?

Answer 38

Gives one party the authority to act on behalf of another party

Question 39

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?

Answer 39

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.

Question 40

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?

Answer 40

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.

Question 41

Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?

Answer 41

The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease’s terms.

Question 42

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?

Answer 42

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.

Question 43

what does Void mean?

Answer 43

totally unenforceable and probably lacked legal effect from the beginning.

Question 44

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?

Answer 44

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.

Question 45

what is consideration in real estate?

Answer 45

a promise, performance, or forbearance bargained by a promisor in exchange for their promise.

Question 46

In which of these situations might an Arizona Multiple Counter Offer form be used?

Answer 46

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.

Question 47

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?

Answer 47

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.

Question 48

is this a unilateral contract statement?
Sherry promises to give Brent a ride home from work, and then doesn’t show up.

Answer 48

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.

Question 49

what is revocation?

Answer 49

When a person or a business making an offer decides to nullify that decision before it is accepted.

Question 50

What is legal covenant?

Answer 50

an agreement between two or more parties regarding certain use of a piece of real property.

Question 51

what is boilerplate purchase contract

Question 52

The assignor is prohibited from making a profit by selling the right to purchase to an assignee.

Answer 52

False

In some cases, the assignor may actually make a profit by selling the right to purchase to an assignee.

Question 53

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?

Answer 53

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.