Module 1 Flashcards
What is an agreement that meets the requirements of the law
Valid Contract
What is an agreement that is invalid from the beginning and does not affect the parties
Void contract
What is a contract where one party has the right to withdraw from the contract
Voidable Contract
What is a contract that violates the Statute of Frauds and will not be enforced by the courts
Unenforceable contract
What is one of the elements of a valid contract. Sane, sober, consenting adults who are recognized by law as being able to contract with others
Competent parties
What is one of the elements of a valid contract, meeting of the minds
Mutual consent
What is one of the elements of a valid contract. If the purpose of the contract is to do an illegal act, the contract is void
Legal purpose
What creates enforceability of a contract according to the statute of frauds
In writing
What is one of the elements of a valid contract. Something of value given by the party to a contract. The buyer’s promise to pay in exchange for the seller’s promise to deliver a deed
Consideration
What is a contract that has been signed by the parties, but not yet carried out – sales contract before closing or contract for deed
Executory contract
What is an exchange of promises binding both parties
Bilateral contract
What is a unilateral contract where one party has the option to buy property at a preset price within a negotiated time period
Option
What is a contract where only one party made a promise, only one party can be sued
Unilateral contract
What is a modification to an existing agreement is made and signed
Amendment
What is additional material or supplemental information added to an agreement
Addendum
What is a substitution of a new party into an existing agreement – can be used to shield the identity of a buyer who wishes to be anonymous
Assignment
What is the substitution of a new contract for an existing one – the original agreement is terminated
Novation
What is it called when bringing an offer or contract to an end before it has been fulfilled
Termination
What is the difference between a void and a voidable contract?
A void contract is invalid from the beginning and does not affect the parties. A voidable contract is one that cannot be enforced against one or more of the parties.
Is Earnest money an element of a valid contract?
No
Five essential elements must exist for a contract to be considered valid and enforceable. They are:
C.O.L.I.C.
Competent Parties
Offer and Acceptance (Mutual Consent)
Legal Purpose
In Writing
Consideration
What is the duration of the executory contract?
Executory contract is from the effective date through closing. Typically, 45-60 days.
Common amendments include:
changes to the closing date, changes to the sales price, down payment, and/or financed amount, repairs, removal of contingencies.
When a provision in an addendum contradicts a provision in the main body of the contract, which one takes precedence over?
the provision in the addendum prevails
Can you assign contracts for personal services, like a listing or buyer representation agreement?
No
