Study guide chapter 11 Flashcards
Consideration
Consideration is known to be the “Promise of Future Money (Funds) pg 184
How to create a Valid real estate contract?
C = competent parties
O = Offer and acceptance
L = Lawful subject
I = In writing
C = Consideration
Offer and Acceptance:
The mutual understanding of the terms and conditions of the contract is reached when an offer is made (offeror) and received and accepted by another party (offeree)( pg 182)
Assignment:
The way contractual rights and responsibilities are transferred from one
person to another. (pg 183)
Statute of Frauds:
Requires a contract for the transfer of the right of interest in land or real property to be in writing to be enforceable in a court of law. (pg 183)
Statute of Limitation:
A statute that stipulates the me limits during which a party may sue for the enforcement of a contract. (pg 183)
How many years does a Parol/oral contract have for their statute of limitations?
A Parol /Oral contract has 4 years Statute of Limitations.
How many years does a written contract have for their statute of limitations?
A written Contract has 5 Years Statute of Limitations
Statute of Frauds:
Stipulates that a contract used to transfer real estate rights must be in writing to be valid. (pg 183)
Implied Contract:
A type of contract that is created if some of the terms and condition must be inferred from acts or conduct of the parties. (pg 184)
Void Contract:
A contract that cannot be enforced and cannot be performed under the law (pg 185)
Voidable contract
Voidable Is a valid agreement that may be enforced; however, the Contract may be cancelled at the option of one of the parties.
Remedies of Breach of a real estate contract: (pg188)
Suit for Cancellation (Rescission)
Suit for specific Performance (due to default of one party)
Suit for Damages
** Recovery Fund is not a Remedy for Breach. **
what happens to a seller that fails to perform under the contract responsibilities?
A seller that fails to perform under the contract responsibilities (fails to close),
maybe sued by the buyer for Specific Performance. The court will issue a final judgement against the seller ordering the seller to close. (pg 161)
Liquidated Damages:
Damages that are specified and agreed upon under the contract (pg 188)
Eg. Seller claims the deposit on a Sale/Purchase contract, broker remains responsible if deposit is returned wrongfully.
Novation:
When a seller is release from responsibility in a mortgage assignment (pg 188)
Note that Novation is NOT a way to terminate an offer-Novation is related to
mortgage assumption not offers and contracts.
As-Is provision in a sales/Purchase real estate contract.
As-Is provision in a sales/Purchase real estate contract, DOES NOT relieves/excuse or circumvent the duty to disclose material defects that may affect the value of the property. (pg 190)
Exclusive Right of Sale Listing:
A listing agreement that provides the best
protection to the broker for the payment of an earned commission regardless of who is
the procurement cause of sale (who procured the buyer), regardless of who actually finds the buyer. It best protects the broker with respect to receiving the commission. (Pg
197)
Option Contract:
The right a party is provided to buy a property at a specific date for a fixed agreed Price. (pg 202)
