contracts of real estate Flashcards
valid
contains all essential elements and by its terms is legally binding on all parties
void
has forms and words of a contract but is not legally binding by its terms
voidable
valid but contains a factual weakness exploitable by one of the parties. lack of capacity, misrepresentation, fraud or duress
unilateral
one party promises to do something upon the completed act of another which is not promised absolutely to occur
bilateral
two parties simultaneously and mutually exchange promises, as when seller promises to sell and buyer promises to buy
executory
signed agreement, but not yet closed, it is incomplete
executed
a contract that is closed and completed. when the deed is delivered at the passing, the provisions of the P&S merge into the deed
assignment of contract
a party may transfer his/her rights/obligations to another party
amendment
after the signing of a contract, any changes are agreed by parties by signature or initials of the changed conditions on the contract
recession
both parties agree to terminate the contract
specific performance
breaching party forced by court to fulfill promise
damages
aggrieved party seeks actual monetary damages incurred
forfeiture
breaching party gives up all or a portion of deposit according to terms of contract
liquidated damages
a sum of money specified in the contract to be paid in event of breach of terms by one of the parties
pricipal
they are clients, seller/vendor, buyer/vendee, landlord or tenant
special agent
they are a broker, property manager- they work directly for the client
subagent
they are a salesperson or co-broker- they work indirectly for the client
the option
the written contract by which an owner, in exchange for consideration gives another party the right to purchase (or lease) property within a certain time and other certain agreed conditions
optionor
the owner who gives right. enforceable against the estate if the optionor dies
optionee
potential buyer or lessee who receives right
if optionee is a lessee, the clause is:
a lease option
advantage
an option contract that goes to the optionee
express authority is
directly stated
implied authority is
principal and agent act as if it exists
apparent authority is
situation gives appearance of authority to other
open listing/open agency
principal hires multiple brokers to earn commission based on the terms specified in the listing agreement. no commission is earned if the seller procures a buyer unassisted
exclusive agency
principal hires only one agency that can earn the commission by being the “efficient and procuring” cause of the sale and may share with other agencies and agents within it
exclusive right to sell
must be in writing
