The Sales Contract Part II

Question 1

Define conveyance.

Answer 1

Conveyance is the transfer of legal title of property from one person to another, or the granting of an encumbrance such as a mortgage or a lien.

Question 2

What are the three stages of conveyance?

Answer 2

Conveyance occurs in three stages: before contract, before completion and after completion.

Question 3

Any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed is known as a what?

Answer 3

This is the definition of a deed.

Question 4

Name the four types of evidence of title.

Answer 4

The four kinds of evidence of title: abstract and opinion, certificate of title, title insurance and Torrens certificate.

Question 5

The Statute of Frauds in Texas requires that all contracts affecting title to or interest in real estate be what?

Answer 5

In writing and signed by the parties. An oral agreement of sale is void and therefore unenforceable.

Question 6

Explain part performance under the Statute of Frauds.

Answer 6

Part performance is proven when the purchaser pays the purchase price, has possession of the land, and makes improvements on the land, all with the permission of the seller.

Question 7

What are the requirements for someone else to sign a contract in the first person’s place?

Answer 7

As long as the person is authorized to do so. This can occur through the power of attorney, corporate management structure, or by creating a contract granting a designated person such authorization.

Question 8

Name three contracts where witnesses to signatures may be needed.

Answer 8

A contract which may require witnesses include, but are not limited to, wills, deeds, mortgages and sometimes marriage contracts.

Question 9

Define breach of contract.

Answer 9

A breach of contract is a failure to perform according to the terms of the agreement. Also called default, a breach of contract gives the damaged party the right to take legal action.

Question 10

When one party announces, in advance of the due date for performance, that he or she intends not to perform on his or her side of the bargain, this is called what?

Answer 10

Anticipatory Breach

Question 11

Explain Renunciation breach of contract.

Answer 11

Renunciation occurs where a party refuses to perform his obligations under the contract. It may be either express or implied. A renunciation occurs when one party, by words or conduct, evinces an intention not to perform, or expressly declares that they will be unable to perform their obligations under the contract in some essential respect.

Question 12

What are the three remedies covered in the Default paragraph of the TREC promulgated forms

Answer 12

Accept the earnest money as liquidated damages
Sue the defaulting party for specific performance
Sue the defaulting party for money damages

Question 13

Define liquidated damages.

Answer 13

A predetermined amount of money stipulated in the contract to be the total amount of compensation the non-defaulting party should receive upon breach by the other party

Question 14

An action brought in a court to compel a party to carry out the terms of a contract. A party would be made to perform his or her obligations under threat of contempt of court is known as what?

Answer 14

A suit for specific performance

Question 15

Define Mediation as set forth in Sec. 154.023.

Answer 15

Mediation is a forum in which an impartial person, the mediator, facilitates communication between parties to promote reconciliation, settlement, or understanding among them.

Question 16

List what a mediator does during mediation.

Answer 16

The mediator does:

Facilitate communication between the disputing parties,
Set ground rules for the process,
Remain impartial throughout the proceeding.

Question 17

Conveyance

Answer 17

the transfer of legal title of property from one person to another, or the granting of an encumbrance such as a mortgage or a lien.

Question 18

A typical conveyance transaction contains two major landmarks:

Answer 18

the exchange of contracts (whereby equitable title passes) and completion (whereby legal title passes).

Question 19

Conveyance occurs in tree stages

Answer 19

before contract, before completion and after completion.

Question 20

A deed is

Answer 20

Any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed.

Question 21

There are four kinds of evidence of title:

Answer 21

abstract and opinion, certificate of title, title insurance and Torrens certificate.

Question 22

Typically associated with selling or buying a home or other property

Answer 22

the escrow agent will secure the property and examine documents to make sure that the terms of the sale are met on each end, serving both the buyer and seller in the transaction.

Question 23

After the abstract is completed

Answer 23

the title company will issue a “Commitment of Title Insurance” to the lender and/or prospective buyer.

Question 24

The Statute of Frauds in Texas requires

Answer 24

that all contracts affecting title to or interest in real estate be in writing and signed by the parties. An oral agreement of sale is void and therefore unenforceable.

Question 25

The Texas Statute of Frauds

Answer 25

A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is
writing: and
signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.
Subsection (1) of this section applies to:
a contract for the sale of real estate; (and)
a lease of real estate for a term longer than one year…

Question 26

A defendant in a statute of frauds case who wishes to use the Statute as a defense must

Answer 26

raise it in a timely manner

Question 27

In an action for specific performance

Answer 27

an agreement to convey land must satisfy the Statute of Frauds.

Question 28

In a majority of jurisdictions, part performance is proven when

Answer 28

the purchaser pays the purchase price, has possession of the land, and makes improvements on the land, all with the permission of the seller

Question 29

Can Someone Else Sign a Contract in the First Person’s Place?

Answer 29

In many instances, yes, as long as the person is authorized to do so. This can occur through the power of attorney, corporate management structure, or ironically yet most commonly, by creating a contract granting a designated person such authorization.

Question 30

When is a Witness to a Signature Needed?

Answer 30

Some contracts require the presence of a witness or witnesses to verify that the document is authentic. A contract which may require witnesses include, but are not limited to, wills, deeds, mortgages and sometimes marriage contracts.

Question 31

A breach of contract is

Answer 31

a failure to perform according to the terms of the agreement. Also called default, a breach of contract gives the damaged party the right to take legal action.

Question 32

Default of a real estate contract is also called

Answer 32

“material breach of contract” or “breach of contract.” Contract law states that a material breach of contract is an irreparable break in a legally binding contract.

Question 33

Actual breach

Answer 33

occurs where one party refuses to form his side of the bargain on the due date or performs incompletely.

Question 34

Anticipatory breach

Answer 34

occurs where one party announces, in advance of the due date for performance, that he or she intends not to perform on his or her side of the bargain. The innocent party may sue for damages immediately when the breach is announced.

Question 35

The non-defaulting party has legal recourse

Answer 35

Three of the remedies are covered in the Default paragraph of the TREC promulgated forms. Basically the choices are:

Accept the earnest money as liquidated damages
Sue the defaulting party for specific performance
Sue the defaulting party for money damages

Question 36

Liquidated Damages

Answer 36

A predetermined amount of money stipulated in the contract to be the total amount of compensation the non-defaulting party should receive upon breach by the other party

Question 37

Sec. 154.023. MEDIATION

Answer 37

Mediation is a forum in which an impartial person, the mediator, facilitates communication between parties to promote reconciliation, settlement, or understanding among them.
A mediator may not impose his own judgment on the issues for that of the parties.

Question 38

Mediation

Answer 38

is the preferred alternative to litigation today and has proven to have a high success rate.

Question 39

Mediator

Answer 39

facilitates negotiation between the parties and helps them arrive at a mutually agreeable solution. The mediator does not render any decision or impose any opinions in the case.

Question 40

The mediator

Answer 40

Facilitates communication between the disputing parties,
Sets ground rules for the process,
Remains impartial throughout the proceeding.

Question 41

Almost any real estate dispute can be settled

Answer 41

In Mediation

Question 42

The advantages of mediation are:

Answer 42

It is fast,
It is low cost,
It is private,
It is often a win-win for the parties.