National 3 Vocabulary

Question 1

A contract that is worded loosely or vaguely and is unenforceable.

Answer 1

Illusory Contract

Question 2

A written employment contract which appoints the broker as the seller’s agent for the purpose of finding a buyer.

Answer 2

Listing Agreement

Question 3

Money or other valuables such as contributed labor of love and affection (gift).

Answer 3

Valid Consideration

Question 4

A legally enforceable agreement to do or not to do a specific thing. A promise or a set of promises the courts will enforce

Answer 4

Contract

Question 5

A contract containing all essential elements

Answer 5

Valid Contract

Question 6

Requires contracts to be in writing to be enforceable

Answer 6

Statute of Frauds

Question 7

A person who has legal capacity to enter into a contract

Answer 7

Competent Party

Question 8

An invitation to enter into a contract

Answer 8

Offer

Question 9

The point at which all parties have agreed to all terms & conditions

Answer 9

Acceptance

Question 10

A contract created by a party’s actions

Answer 10

Implied Contract

Question 11

A contract which has been fully performed

Answer 11

Executed contract

Question 12

The essential elements of a contract are:

Answer 12

Competent parties
 Consideration
 Meeting of minds
 Lawful purpose
 Be in writing
 Proper property description

Question 13

A contract in which all the terms are specified

Answer 13

Expressed Contract

Question 14

A contract in which all terms have yet to be performed

Answer 14

Executory Contract

Question 15

A contract in which each party makes a promise

Answer 15

Bilateral Contract

Question 16

The purpose (objective) of a contract must be lawful

Answer 16

Legal Object (Legal Purpose)

Question 17

A contract in which only one party makes a promise

Answer 17

Unilateral Contract

Question 18

A contract requiring one person to give another the initial opportunity to buy a property

Answer 18

Right of First Refusal

Question 19

A listing in which the broker keeps a portion of the sales price above an amount agreed to by the seller

Answer 19

Net Listing

Question 20

A contract which has no force or effect on any party

Answer 20

Void Contract

Question 21

A listing in which the broker will be paid only if the broker finds a buyer

Answer 21

Open Listing

Question 22

An exclusive listing in which the seller reserves the right to find a buyer and not pay the broker

Answer 22

Exclusive Agency Listing

Question 23

A listing in which the seller pays the broker even if the seller finds a buyer

Answer 23

Exclusive Right to Sell

Question 24

A contract giving exclusive rights to buy a property within a specific time

Answer 24

Option

Question 25

A listing in which the broker also has the right to buy the property

Answer 25

Option Listing

Question 26

A contract which could be overturned by one or both parties

Answer 26

Voidable Contract

Question 27

This law limits monopolies and prohibits price fixing

Answer 27

Sherman Anti-Trust Act

Question 28

An employment contract in which the buyer hires the broker

Answer 28

Buyer Brokage Agreement

Question 29

Someone who has reached the age of majority

Answer 29

Adult (Competent Party)

Question 30

Formulas for area, total cost, and cost per square unit

Answer 30

Cost per unit = Total cost / # of units
 Total cost = Cost per unit X # of units
 # of units = Total cost / Cost per unit