SU # 53__Purchase Agreements Flashcards
What is the difference between a void contract and a voidable contract?
A void contract is an agreement that does not meet the tests for validity, and therefore is no contract at all.
A voidable contract is one which initially appears to be valid, but is subject to cancellation by a party to the contract who is believed to have acted under some kind of disability.
What is the difference between an express contract and an implied contract?
An express contract is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing.
An implied contract is an unstated or unintentional agreement that may be considered to exist when the actions of any of the parties suggest the existence of an agreement.
What are the five criteria of a valid contract?
Competent parties Mutual agreement Lawful objective Consideration In writing
When must a suit for damages be initiated?
The suit must be initiated within the time period allowed by the Statute of Limitations.
List five provisions typically found in Illinois sales contracts?
Identification of parties Legal description Personal property provision Consideration Terms of payment
What does “time is of the essence” mean?
This phrase emphasizes the requirement that events related to the contract must be performed on time.
What is a right of first refusal?
The right of a person to have the first opportunity to purchase or lease a property.
What is a letter of intent?
A letter of intent is really an agreement to agree. It outlines the terms between parties who have not formalized an agreement into a contract.
A promise by one party to act or perform in a specified manner provided the other party acts or performs in the manner requested is known as:
An offer
A contract
Good consideration
Valuable consideration
An offer
According to contract law, every valid contract is also:
void.
enforceable.
enforceable or unenforceable.
voidable.
enforceable or unenforceable.
A contract in which the party or parties have not completed all acts under the contract is known as:
bilateral
unilateral
executory
executed
executory
A contract to commit an illegal act is:
Legal
Void
Okay, if there are two witnesses
Okay if it is written and contains the signatures of two witness
Void
Which of the following factors must be present for a contract to be valid?
Recorded
Involuntary
Placed in the public record
Mutual agreement
Mutual agreement
What is an important legal feature of a contract?
It is not voidable.
It must use precise wording in a document.
It represents a “meeting of the minds.”
It can be created only by an attorney.
It represents a “meeting of the minds.”
An oral or written contract in which the parties state the contract’s terms and communicate their intentions in words is known as:
An implied contract
An express contract
Legally void
Voluntary
An express contract
An implied contract may be deemed to exist if:
The parties do not disavow an express contract that has expired.
The parties act as if there is a contract.
An offering party does not receive written notice that the offer has been rejected.
The parties promise to perform their part of the agreement if the other party performs.
The parties act as if there is a contract.
A letter of intent is basically _______________________.
an agreement to agree.
designed for long term leases.
prepared by the seller’s account.
designed for short term rentals.
an agreement to agree.
Those people who are of legal age and sound mind are considered:
Legally competent parties
Legally enforceable parties
Legally considerate parties
Legally viable parties
Legally competent parties
What is a breach of contract?
A termination of the contract by the mutual consent of the parties.
Financial damage suffered by a party because another party has nullified a contract provision.
A lawsuit to force a party to discharge the contract.
The failure of a party to perform according to the terms of the contract.
The failure of a party to perform according to the terms of the contract.
The necessary condition of mutual consent may be found lacking in a contract if:
The two parties did not discuss every possible interpretation of the contract’s provisions.
The offer which was accepted is vague.
One party did not have the legal authority to sign the contract.
The agreement is unwritten
The offer which was accepted is vague.
Several buyers are competing for the last available home in a desirable new subdivision. One buyer calls the owner-developer directly on the phone and offers $10,000 over and above the listed price. The developer accepts the offer. At this point,
a. the parties have a valid, enforceable sale contract on the home.
b. the parties have completed a verbal, executory contract.
c. the parties may not cancel their contract.
d. the developer could not entertain other offers on the property
b. the parties have completed a verbal, executory contract.
An owner completes a contract to sell her property. Before closing, the seller runs into financial trouble and assigns the contract to her principal creditor. The buyer cries foul, fearing the property will be lost. Which of the following is true?
a. The buyer can sue the assignee to disallow the illegal assignment.
b. The buyer can take legal action against the assignor.
c. The assignor has completed a legal action.
d. The sale contract is nullified.
c. The assignor has completed a legal action.
During the executory period of a sale contract, the buyer acquires an equitable title interest in the property. This means that
a. the buyer can potentially force the seller to transfer ownership.
b. both parties own the property equally.
c. if contract contingencies are not met, the buyer takes legal title.
d. the buyer owns equity in the subject property to the extent of the funds deposited in escrow.
a. the buyer can potentially force the seller to transfer ownership.
The purpose of an escrow account is to
a. entrust deposit monies to an impartial fiduciary.
b. enable the principals to access the funds in escrow without interference from the other party.
c. ensure that the broker receives her commission.
d. prevent the buyer from withdrawing the offer
a. entrust deposit monies to an impartial fiduciary
