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Principles of Real Estate 1 > Module 12 > Flashcards

Module 12 Flashcards

1
Q

Contract

A

An agreement between two or more parties to do something or refrain from doing something

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2
Q

Bilateral Contract

A

A contract that is binding on both parties, creating mutuality

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3
Q

Valid Contract

A

A contract that meets all of the requirements of law

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4
Q

Unenforceable Contract

A

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

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5
Q

Executory Contract

A

A contract under which something remains to be done by one or more of the parties

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6
Q

Assignment

A

The transfer in writing of interest in a bond, mortgage, lease or another instrument.

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7
Q

Proration

A

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)

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8
Q

Implied Contract

A

A contract under which the agreement of the parties is demonstrated by their acts and conduct

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9
Q

Unilateral Contract

A

A contract in which the only the offeror is under obligation to perform

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10
Q

Void Contract

A

A contract that does not meet the requirements of law and does not affect the parties

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11
Q

Mutual Rescission

A

Both parties agree to terminate a contract

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12
Q

Default

A

The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due

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13
Q

Novation

A

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

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14
Q

Mediation

A

The process of dispute resolution as an alternative to settling the dispute in court

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15
Q

Express Contract

A

An oral or a written contract in which the parties state the contract’s terms and express their intentions in words

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16
Q

Promulgated Forms

A

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

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17
Q

Voidable Contract

A

A contract that cannot be enforced against one or more of the parties

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18
Q

Statute of Frauds

A

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

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19
Q

Fully Executed

A

A contract that has all of its terms and conditions met

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20
Q

Earnest Money

A

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

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21
Q

Option

A

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

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22
Q

Liquidated Damages

A

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.

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23
Q

Lacks mutuality

A

Unilateral contract

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24
Q

A contract that cannot be enforced because a flaw in the contract or some other issue

A

Unenforceable contract

25
Q

Contract created by acceptance of an offer

A

Express Contract

26
Q

A contract created by behavior

A

Implied Contract

27
Q

A contract under which both parties are obligated to perform

A

Bilateral Contract

28
Q

A contract which is demonstrated by the actions and conduct of the parties.

A

Implied Contract

29
Q

A contract that is binding on both parties.

A

Bilateral Contract

30
Q

A contract that binds only one party like an option contract.

A

unilateral contract

31
Q

A contract that is created in writing or orally.

A

express contract

32
Q

Promulgated forms are written by the

A

Broker Lawyer Committee

33
Q

Who writes or drafts the promulgated forms?

A

The Broker Lawyer Committee drafts the promulgated forms

34
Q

A Buyer’s Temporary Residential Lease of a Seller’s Temporary Residential Lease is for use up to _______ days.

A

90

35
Q

A Right of First Refusal contract and a Lease with an Option to Purchase may be written by a(n)

A

attorney

36
Q

Promulgates contract forms for residential and farm and ranch real estate

A

TREC

37
Q

Contracts entered into by minors are voidable by option of the

A

minor

38
Q

True or False: Only written offers must be presented to the intended party.

A

F

39
Q

True or False: Contracts executed by a minor are voidable at the discretion of the minor.

A

T

40
Q

True or False: To be valid, a contract must be in writing.

A

F

41
Q

True or False: A void contract is binding on one of the parties only.

A

F

42
Q

True or False: A valid contract has mutual agreement by both parties.

A

T

43
Q

True or False: An executory contract is a contract that all the terms and conditions have been met.

A

F

44
Q

True or False: Offers terminate by the acts of the parties or by an operation of the law.

A

T

45
Q

The seller can choose to accept the buyer’s earnest money as _______________________, releasing all parties from any further obligation

A

Liquidated Damages

46
Q

An ________________ of a contract transfers all of the rights related to the contract to another party known as an assignee.

A

assignment

The assignee assumes primary liability for performance under the contract, and the assignor, unless released, remains secondarily liable.

47
Q

A/n _______ is an agreement between two or more parties to either do something or to refrain from doing something.

A

Contract

48
Q

Contracts that are created in writing or orally are called _______ contracts.

A

Express

49
Q

Contracts that are not stated but are just understood or are created by actions are called _______ contracts.

A

Implied

50
Q

The _______ requires that the transfer of any interest in real estate to be in writing to be enforceable.

A

Statue of Frauds

51
Q

An option contract is an example of a/n _______ contract.

A

Unitlateral

52
Q

_______ contracts are enforceable on both parties meaning both buyer and seller must perform.

A

Bilateral

53
Q

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 _______.

A

Broker lawyer committee

54
Q

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.

A

unauthorized practice of law

55
Q

To be both Valid and Enforceable, a contract must have _______.

A

COLIC

56
Q

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.

A

Executory

57
Q

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.

A

Assignment

58
Q

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.

A

Novation

Principles of Real Estate 1 (12 decks)

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