Module 12 Flashcards
Contract
An agreement between two or more parties to do something or refrain from doing something
Bilateral Contract
A contract that is binding on both parties, creating mutuality
Valid Contract
A contract that meets all of the requirements of law
Unenforceable Contract
A contract that cannot be enforced because of a flaw or some other issue; a contract that violates the Statute of Frauds (an Oral Contract for the transfer of an interest in real estate is unenforceable
Executory Contract
A contract under which something remains to be done by one or more of the parties
Assignment
The transfer in writing of interest in a bond, mortgage, lease or another instrument.
Proration
Expenses, either prepaid or paid in arrears, that are divided or distributed between the buyer and seller at the closing (such as taxes, insurance, interest and rents)
Implied Contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct
Unilateral Contract
A contract in which the only the offeror is under obligation to perform
Void Contract
A contract that does not meet the requirements of law and does not affect the parties
Mutual Rescission
Both parties agree to terminate a contract
Default
The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due
Novation
Substituting a new obligation for an old one or substituting new parties to an existing obligation; when the parties to an agreement accept a new debtor in place of an old one
Mediation
The process of dispute resolution as an alternative to settling the dispute in court
Express Contract
An oral or a written contract in which the parties state the contract’s terms and express their intentions in words
Promulgated Forms
The Texas Real Estate Commission has prepared and authorized various standard contracts that must be used by all License Holders when acting as agents in real estate transactions with limited specific exceptions
Voidable Contract
A contract that cannot be enforced against one or more of the parties
Statute of Frauds
That part of state law that requires certain instruments, such as deeds, real estate sales contracts, and certain leases to be in writing to be legally enforceable
Fully Executed
A contract that has all of its terms and conditions met
Earnest Money
An amount of money, deposited by a prospective buyer as evidence of good faith under the terms of a contract, that is to be forfeited if the buyer defaults, but applied on the purchase price if the sale is closed
Option
The right to purchase property within a definite time at a specified price; there is no obligation to purchase, but the seller is obligated to sell if the option holder exercises the right to purchase
Liquidated Damages
Damages that are stipulated in a contract that a seller can accept from a buyer’s earnest money. Doing so releases all parties from further obligations under the contract.
Lacks mutuality
Unilateral contract
A contract that cannot be enforced because a flaw in the contract or some other issue
Unenforceable contract
Contract created by acceptance of an offer
Express Contract
A contract created by behavior
Implied Contract
A contract under which both parties are obligated to perform
Bilateral Contract
A contract which is demonstrated by the actions and conduct of the parties.
Implied Contract
A contract that is binding on both parties.
Bilateral Contract
A contract that binds only one party like an option contract.
unilateral contract
A contract that is created in writing or orally.
express contract
Promulgated forms are written by the
Broker Lawyer Committee
Who writes or drafts the promulgated forms?
The Broker Lawyer Committee drafts the promulgated forms
A Buyer’s Temporary Residential Lease of a Seller’s Temporary Residential Lease is for use up to _______ days.
90
A Right of First Refusal contract and a Lease with an Option to Purchase may be written by a(n)
attorney
Promulgates contract forms for residential and farm and ranch real estate
TREC
Contracts entered into by minors are voidable by option of the
minor
True or False: Only written offers must be presented to the intended party.
F
True or False: Contracts executed by a minor are voidable at the discretion of the minor.
T
True or False: To be valid, a contract must be in writing.
F
True or False: A void contract is binding on one of the parties only.
F
True or False: A valid contract has mutual agreement by both parties.
T
True or False: An executory contract is a contract that all the terms and conditions have been met.
F
True or False: Offers terminate by the acts of the parties or by an operation of the law.
T
The seller can choose to accept the buyer’s earnest money as _______________________, releasing all parties from any further obligation
Liquidated Damages
An ________________ of a contract transfers all of the rights related to the contract to another party known as an assignee.
assignment
The assignee assumes primary liability for performance under the contract, and the assignor, unless released, remains secondarily liable.
A/n _______ is an agreement between two or more parties to either do something or to refrain from doing something.
Contract
Contracts that are created in writing or orally are called _______ contracts.
Express
Contracts that are not stated but are just understood or are created by actions are called _______ contracts.
Implied
The _______ requires that the transfer of any interest in real estate to be in writing to be enforceable.
Statue of Frauds
An option contract is an example of a/n _______ contract.
Unitlateral
_______ contracts are enforceable on both parties meaning both buyer and seller must perform.
Bilateral
Real estate license holders do not have the authority to write agreements. The Texas Real Estate Commission has promulgated contracts and addenda for real estate license holders to use. These documents are written by the _______.
Broker lawyer committee
An agent who writes his or her own contracts or makes changes to TREC’s promulgated forms is guilty of the _______. Agents may add factual statements and business details to TREC forms.
unauthorized practice of law
To be both Valid and Enforceable, a contract must have _______.
COLIC
Contracts that have been signed are called executed contracts. The period of time from the effective date to the closing date is called the _______ period. It is the time period the parties are working on meeting their obligations.
Executory
A/n _______ of contract transfers all the rights related to the contract to another person known as the assignee. Though the assignee assumes primary liability of the contract, the original party is still liable if the assignee fails to perform.
Assignment
A/n _______ occurs when a new contract is substituted for an existing contract. The original contract is cancelled and a new one takes its place.
Novation
