Level 10 - Basic Contract Law Flashcards
Exclusive Buyer Agency Agreement
an agreement in which the buyer has an exclusive relationship with one broker.
Nonexclusive Buyer Agency Agreement
an agreement that gives a specified broker the right to find a property for the buyer and earn a commission, but the buyer also has the right the enter into other nonexclusive agreements with other brokers or even purchase the property directly from the seller without a broker
pre-qualification
the process of estimating the maximum loan amount a buyer is likely to be eligible to obtain and the approximate purchase price they can afford.
Contract
a legally enforceable and binding agreement between parties wherein promise to do or not do something is given in exchange for valuable consideration.
Consideration
something of value exchanged by the parties as evidence of agreement to the terms of a contract.
Duress
the unlawful effort, such as threats of physical violence or other pressure, to coerce a party to perform an act.
Enforceability
possessing the essential elements necessary to be legally binding and obligate performance; used to describe the compelling nature of a valid contract.
Fraud
wrongful or criminal deception intended to result in financial or personal gain.
Goodwill
good consideration, such as love and affection, that can be exchanged for valuable consideration in a contract or agreement; the exchange of which is generally seen as a gift on the part of the party giving up the valuable consideration.
Mistake
an erroneous impression on the part of one or both parties regarding some material aspect of a contract.
Mistake of Law
a mistake which requires that there be a misunderstanding of all parties regarding the understanding or awareness of applicable law.
Mutual Assent
the fully agreed-upon exchange of promises by the parties; aka for and acceptance.
Null and Void
lacking legal or binding force; invalid
Offer
a proposition made by an offered to an offer to agree to the terms of a binding contract; becomes a contract upon acceptance.
Parol Evidence Rule
legal concept with dictates that oral evidence can be used to support a written contract but cannot be used to contradict one.
Status of Frauds
a law that requires certain types of contracts, including those conveying interest in real property, to be in writing to be enforceable.
Status of Limitations
a legal concept that establishes time limits for bringing certain kinds of legal actions
Undue Influence
the act of persuading another’s decisions due to the relationship between the two parties
Valid Contract
a contract possessing the essential elements necessary to be legally binding and obligate performance; is binding and enforceable on both parties.
Void
lacking legal or binding force; used to describe a contract that is either illegal or impossible to complete
Void Contract
a contract lacking legal or binding force; often used with a phrase “null and void”
Voidable Contract
a contract wherein the wronged party has the option to perform, enforce, or void the contract.
addenda
additions to a completed contract that specify supplementary information to the contract
acceptance
an offeree’s agreement to the terms of an offer
amendments
the change of existing information to the contract
bilateral contract
a contract wherein both parties are obligated to perform in an exchange of promises
contingency
a provision within a contract that makes performance conditional upon the occurrence of a stated event
counteroffer
a contract proposal submitted in response to a previous offer, modifying the terms of the original offer; considered a rejection of the original offer
Executed Contract
a contract in which all terms have been fulfilled by all parties
executory contract
a contract that has not yet been fully performed (both sides have not yet completed their obligations)
express contract
an oral or written contract ins which the parties explicitly state or express their intentions and their expectations regarding the contract and the exchange of promises.
implied contract
a contract created by the actions of the parties rather than by express agreement
mailbox rule
legal concept which states that once written acceptance is place in control of the mailing service, and out of the control of the offer, it is considered accepted, not when the acceptance is actually received by the offeror.
offeree
party receiving the offer
offeror
party making the offer
time being of the essence
communicated to parties of a contract that they must perform their contractual duties by a specific date and time in order to avoid a breach of contract
with reserve
term used for auctions where seller has the right to stop bidding for any reason
without reserve
term used for auctions where seller agrees to accept the highest bid regardless of the bid; aka absolute auction
unilateral contract
a contract wherein one party makes a promise and is obligated to perform if a second party choose to accept the offer and perform in exchange for that which was promised.
accord and satisfaction
an agreement in which the parties agree to discharge the original contract in favor of a new one, wherein accepted performance is often less than what was initially owed.
assignee
person to whom the assignment is made
assignment
the transference of rights and obligations in a contract from one party to another
assignor
the person assigning a contract
compensatory damages
the award given to a wronged party as compensation for actual injury or loss; aka actual damages
consequential damages
damages sought as a direct “consequence” of a party’s conduct, or, the breach of contract; aka special damages
liquidated damages
damages established by the contract to be paid as compensation in the event of default.
novation
a mutual agreement of the parties to replace an existing contract with a new one.
release
a mutual agreement of the parties wherein one party frees the other from contractual duties.
rescission
an attempt to put the parties back in a position as though the contract never existed; aka annulment
specific performance
a legal remedy that requires the party in breach of contract to perform in accordance with the terms of the contract (as opposed to paying damages)
