Contracts Vocab

Question 1

Acceleration clause

Answer 1

A provision in a mortgage or trust deed that may require the unpaid balance of the mortgage loan to become due immediately if the regular mortgage payments are not made, or if other terms of the mortgage are not met.

Question 2

ACTUAL FRAUD

Answer 2

Intentional misrepresentation of a material fact in order to induce another person to act on it and consequently to surrender some legal right or part with something of value.

Question 3

ADHESION

Answer 3

Drafting a contract that is one-sided, favoring the party who drafted the contract.

Question 4

BILATERAL CONTRACT

Answer 4

A contract in which the parties involved give mutual promises. Also called “reciprocal” contracts.

Question 5

Breach

Answer 5

Violation of an obligation, duty, or law; especially an unexcused failure to perform a contractual obligation. A violation of any legal obligation or contract.

Question 6

Collateral

Answer 6

Property (personal or real) accepted by a lender as security for a loan, which can be sold if the borrower fails to repay as agreed.

Question 7

COMPETENT PARTIES

Answer 7

Individuals who possess the legal capacity to enter into a binding contract.

Question 8

Constructive fraud

Answer 8

The breach of a legal or equitable duty that the law declares fraudulent because of its tendency to deceive others.

Question 9

Damages

Answer 9

Should breach of contract cause the termination of the agreement, the only remedy is money . Specific performance, or forcing someone to perform an act that they had contracted to perform, is not a remedy for breach of a listing agreement.

Question 10

Due on sale

Answer 10

provision often stipulated in a mortgage loan contract, which gives the lender the right and option to require full and immediate repayment of the entire balance you still owed on the loan at any future time when you ever sell or transfer the property.

Question 11

Duress

Answer 11

Unlawful force or action by one person against another in an attempt to coerce the person to perform some act against his or her will. Duress is a useful defense against enforcing a contract because there is no genuine meeting of the minds

Question 12

Executory

Answer 12

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Question 13

Graduated lease

Answer 13

A lease, generally long term in nature, which provides that the rent will vary depending upon future contingencies, such as a periodic appraisal, the tenant’s gross income or simply the passage of time.

Question 14

Gross lease

Answer 14

Lease in which tenant pays fixed rent (the base rent), landlord pays taxes, insurance and all other operating costs. Also called fixed, flat and full-service lease in some markets.

Question 15

Ground lease

Answer 15

A lease which keeps the ownership of the land separate from that of the improvements. The landlord leases the land to the tenant, but the tenant owns the improvements.

Question 16

Implied contract

Answer 16

An agreement not expressly stated but implied by actions of the parties.

Question 17

Legal object

Answer 17

When a contract is legally binding to all parties the contract has legal object.

Question 18

LIQUIDATED DAMAGES

Answer 18

When a real estate deal goes awry, one party often is entitled to liquidated damages, a sum of money set out in the purchase contract in that event.

Question 19

LISTING AGREEMENT

Answer 19

A listing agreement is a contract that creates the agency relationship between a broker and a client.

Question 20

MISREPRESENTATION

Answer 20

In contract law, a misrepresentation is a false statement of fact made by one party to another party and has the effect of inducing that party into the contract.

Question 21

Option

Answer 21

A contract that gives one party the right to do something (such as purchase a piece of property), without obligating him or her to do it.

Question 22

Optionor

Answer 22

The person who gives an option to the optionee.

Question 23

Optionee

Answer 23

The person to whom an option is given

Question 24

PERCENTAGE LEASE

Answer 24

Rent structured as an amount based on a percentage of the retailer’s sales generated at the leased site, with or without a base rent.

Question 25

Periodic tenancy

Answer 25

A periodic tenancy has no fixed termination date. Instead, the periodic tenancy lasts for a specific period (for example, one month) and continues for successive similar periods (another month) until either party gives proper notice of termination.

Question 26

PROCURING CAUSE

Answer 26

Setting into motion an unbroken series of events that leads to a completed transaction.

Question 27

Revoke

Answer 27

The process of terminating, canceling, or annulling an offer.

Question 28

Rescission

Answer 28

The cancellation of a contract. In certain real estate-secured transactions that involve the refinance of a primary residence, applicants have three business days to cancel the transaction.

Question 29

Sale agreement

Answer 29

See: Purchase Agreement

Question 30

Sale fall-through

Answer 30

When an accepted offer, due to specific circumstances cannot be closed and the property goes back on the market.

Question 31

Specific performance

Answer 31

Specific performance is forcing some-one to perform an act that they had contracted to perform.

Question 32

Subordination clause

Answer 32

A clause in a second lien, which recognizes the priority of prior (first)

Question 33

Statute of Frauds

Answer 33

Real estate transactions are subject to the Statute of Frauds, which requires that certain agreements be in writing

Question 34

Tenancy at sufferance

Answer 34

A tenancy where-as the one who came into possession rightfully, continues in possession wrongfully after the right thereto is terminated.

Question 35

Tenancy at will

Answer 35

An estate in realty that comes within the term lease and that is based on the express or implied consent of the landlord. The holding of possession of realty by consent of owner for an indefinite period of time.

Question 36

Tenancy for years

Answer 36

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Question 37

Termination

Answer 37

Just as a listing agreement can be created in the same way any other contract can, it can also be terminated in the same way.

Question 38

Triple net

Answer 38

Lease which requires tenant to pay property expenses such as taxes, insurance, maintenance, utilities, etc.

Question 39

Undue influence

Answer 39

Taking advantage of another because of a unique position of trust, such as a doctor-patient or an attorney-client relationship.

Question 40

Unilateral contract

Answer 40

A unilateral contract is a contract under which only one party has to perform an obligation. Listing agreements, options, and rights of refusal are examples of unilateral contracts.

Question 41

Void

Answer 41

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Question 42

Voidable

Answer 42

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