Real Estate Contracts

Question 1

Assignment

Answer 1

The transfer to another of any property in possession or in action, or of any estate or right therein. A transfer by a person of that person’s rights under a contract.

Question 2

Attorney-in-fact

Answer 2

One who is authorized to perform specific acts for another under a power of attorney.

Question 3

Bilateral Contract

Answer 3

A contract in which each party promises to do something.

Question 4

Competent

Answer 4

A party to a contract who possesses the legal capacity to enter into a binding contract.

Question 5

Contract

Answer 5

An agreement between two or more competent parties to do, or not do, a specified legal act for a legal consideration.

Question 6

Culpable Negligence

Answer 6

Inadequate performance of responsibilities by those who know, or should know what is expected of them.

Question 7

Exclusive Agency Listing

Answer 7

A listing agreement employing a broker as the sole agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold through any other broker, but not if a sale is negotiated by the owner without the services of an agent.

Question 8

Exclusive-Right-of-Sale Listing

Answer 8

A listing agreement employing a broker to act as agent for the seller of real property under the terms of which the broker is entitled to a commission if the property is sold during the duration of the listing through another broker or by the owner without the services of an agent.

Question 9

Fraud

Answer 9

Intentionally deceiving or misrepresenting a material fact.

Question 10

Liquidated Damages

Answer 10

A sum agreed upon by the parties to be full damages if a certain event occurs.

Question 11

Meeting of the Minds

Answer 11

The point when two parties, thinking the same thing, reach an agreement through an offer and acceptance.

Question 12

New Listing

Answer 12

A listing which provides that the agent may retain as compensation for agent’s services all sums received over and above a net price to the owner.

Question 13

Novation

Answer 13

The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties.

Question 14

Open Listing

Answer 14

An authorization given by a property owner to a real estate agent wherein said agent is given the nonexclusive right to secure a purchaser; open listings may be given to any number of agents without liability to compensate any except the one who first secures a buyer ready, willing, and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer.

Question 15

Option Contrast

Answer 15

An agreement for a specified period of time to honor an offer to sell or lease real property.

Question 16

Statute of Frauds

Answer 16

A state law, based on an old English statute, requiring certain contracts to be in writing and signed before they will be enforceable at law, e.g., contracts for the sale of real property, contracts that are not performed within one year.

Question 17

Statue of Limitations

Answer 17

A statute prescribing a period of limitations for the bringing of certain kinds of legal actions

Question 18

Unenforceable

Answer 18

Something that was valid when made but either cannot be proved or will not be upheld by a court.

Question 19

Unilateral Contract

Answer 19

A contract in which one party promises to do something if the other party performs a certain act, but the other party does not promise to perform it; the contract is formed only if the other party does perform the requested act.

Question 20

Valid Contract

Answer 20

A legally binding or enforceable contract containing the four essential elements: competent parties, mutual assent, legal purpose, consideration.

Question 21

Void Contract

Answer 21

A contract that is unenforceable.

Question 22

Voidable Contract

Answer 22

A contract which is capable of being adjudged void, but is not void unless action is taken to make it so.