Unit 11 Key Terms Flashcards
A change to the existing content of a contract (if words of provisions are added or deleted from the body of the contract). Must be initialed by all parties.
Amendment
The transfer in writing of interest in a bond, mortgage, lease or other instrument.
Assignment
A contract by which all parties to the instrument are legally bound to act as prescribed.
Bilateral contract
Violation of any terms or conditions in a contract without legal excuse; ie failure to make a payment when due.
Breach of contract
1) That received by the grantor in exchange for the deed. 2) Something of value that induces a person to enter into a contract.
Consideration
Provisions in a contract that require a certain act to be done or a certain event to occur before the contract becomes binding.
Contingencies
A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy.
Contract
A new offer made in response to an offer received. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.
Counteroffer
Relevant information of facts that are known or should have been known.
Disclosure
Money deposited by the buyer under the terms of the contract, to be forfeited if the buyer defaults but to be applied to the purchase price if the sale is closed.
Earnest money
A contract that meets all the elements of a valid contract, including compliance with any applicable statue of frauds, or other law that requires it to be in writing and signed by the parties.
Enforceable contract
A contract in which all parties have fulfilled their promises and thus performed the contract.
Executed contract
A contract under which something remains to be done by one or more of the parties.
Executory contract
An oral or written contract in which the parties state the contracts terms and express their intentions in words.
Express contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Implied contract
A real estate sale can be made under a _____ contract. Under this, the owner/seller (vendor) retains legal title.
Land contract
An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract.
Liquidated damages
Substituting a new obligation for an old one or substituting new parties to an existing obligation.
Novation
Two essential components to a valid contract; a “meeting of the minds.” An ____ is a promise made by the offeror, requesting something in exchange for that promise. ___ is a promise by the offeree to be bound by the exact terms proposed by the offeror.
Offeror- makes the offer
Offeree- the person to whom the offer is made
Offer and accptance
An agreement to keep open for a set period an offer to sell or purchase property.
Option
The seller is the primary lender, securing the property by means of a deed, note and mortgage, deed of trust, or contract for deed. The buyer takes possession of the property and the seller retains legal title until paid in full, but some states have allowed the buyer to legal title after a specified period of successful loan payments.
Owner financing
A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate.
Purchase money mortgage
The practice of one party cancelling or terminating a contract, which has the effect of returning the parties to their original positions before the contract was made.
Rescission
The law pertaining to the period of time within which certain actions must be brought to court.
Statue of limitations
If a seller breaches a real estate sales contract, they buyer may sue for ______ unless the contracts specifically states otherwise. The buyer asks the court to force the seller to go through with the sale and transfer the property as previously agreed.
Suit for specific performance
A phrase in a contract that requires the performance of certain act within a stated period of time.
“Time is of the essence”
A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance on it. ie an unsigned contract is generally unenforceable.
Unenforceable contract
A one-sided contract wherein one party makes a promise so as to induce a second party to do something, The second party is not legally bound to perform; however, if the second party does comply, the first party is obligated to keep the promise.
Unilateral contract
A contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it.
Valid contract
A contract that has no legal force or effect because it does not meet the essential elements of a contract.
Void contract
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
Voidable contract
