contracts of real estate

Question 1

valid

Answer 1

contains all essential elements and by its terms is legally binding on all parties

Question 2

void

Answer 2

has forms and words of a contract but is not legally binding by its terms

Question 3

voidable

Answer 3

valid but contains a factual weakness exploitable by one of the parties. lack of capacity, misrepresentation, fraud or duress

Question 4

unilateral

Answer 4

one party promises to do something upon the completed act of another which is not promised absolutely to occur

Question 5

bilateral

Answer 5

two parties simultaneously and mutually exchange promises, as when seller promises to sell and buyer promises to buy

Question 6

executory

Answer 6

signed agreement, but not yet closed, it is incomplete

Question 7

executed

Answer 7

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

Question 8

assignment of contract

Answer 8

a party may transfer his/her rights/obligations to another party

Question 9

amendment

Answer 9

after the signing of a contract, any changes are agreed by parties by signature or initials of the changed conditions on the contract

Question 10

recession

Answer 10

both parties agree to terminate the contract

Question 11

specific performance

Answer 11

breaching party forced by court to fulfill promise

Question 12

damages

Answer 12

aggrieved party seeks actual monetary damages incurred

Question 13

forfeiture

Answer 13

breaching party gives up all or a portion of deposit according to terms of contract

Question 14

liquidated damages

Answer 14

a sum of money specified in the contract to be paid in event of breach of terms by one of the parties

Question 15

pricipal

Answer 15

they are clients, seller/vendor, buyer/vendee, landlord or tenant

Question 16

special agent

Answer 16

they are a broker, property manager- they work directly for the client

Question 17

subagent

Answer 17

they are a salesperson or co-broker- they work indirectly for the client

Question 18

the option

Answer 18

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

Question 19

optionor

Answer 19

the owner who gives right. enforceable against the estate if the optionor dies

Question 20

optionee

Answer 20

potential buyer or lessee who receives right

Question 21

if optionee is a lessee, the clause is:

Answer 21

a lease option

Question 22

advantage

Answer 22

an option contract that goes to the optionee

Question 23

express authority is

Answer 23

directly stated

Question 24

implied authority is

Answer 24

principal and agent act as if it exists

Question 25

apparent authority is

Answer 25

situation gives appearance of authority to other

Question 26

open listing/open agency

Answer 26

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

Question 27

exclusive agency

Answer 27

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

Question 28

exclusive right to sell

Answer 28

must be in writing