Unit 11: real estate contracts Flashcards
addendum
Any provision added to an existing contract without altering the content of the original. Must be signed by all parties.
amendment
A change to the existing content of a contract. Must be initialed by all parties.
assignment
The transfer in writing of interest in bond, mortgage, lease, or other instrument.
binder
An agreement that may accompany an earnest money deposit for thr purchase of real property as evidence of the purchaser’s good faith and intent to complete the transaction.
breach of contract
Violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when it is due
contract
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. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
consideration
That recieved by the grantor exchange for the deed.
contingencies
Provision in a contract that require a certain act to be done or a certain even to occur before the contract becomes binding.
counteroffer
A new offer made in response to an offer recieved. It has the effect of rejecting the original offer, which cannot be accepted thereafter unless revived by the offeror.
discharge
The act of terminating a contract or agreement; this may be done when it has been completely performed for by another party’s breach or default.
earnest money
Money deposited by a buyer under the terms of a contract, to be forfeited if th buyer defaults but to be applied to the purchase price if the sale is closed.
enforceable contract.
A contract that meets all the elements of a valid contract, including compliance with any applicable stature of frauds or other law that requires it to be in writing and signed by the parties.
equitable title
The interest held by a vendee under a contract for deed or an installment contract in which title is not immediately transferred; the equitable right to obtain absolute ownership to property when legal title is held in another’s name.
estate tax
Federal tax ona decedent’s real and personal property
executed contract
A contract in which all parties have fulfilled their promises and thus performed the contract.
executory contract
A contract under which something remains to be done by one or more of the parties
legally competent parties
People who are recognized by law as being able to contract with others; those of legal age and sound mind.
liquidated damages.
An amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract.
mutual assent
Requirement that there must be complete agreement between the parties about the purpose and terms of a contract.
novation
Substitutihng a new obligation for an old one or substitting new parties to an existing obligation.
offer and acceptance
Two essential components of a valid contract; a “meeting of the mind” An offer is a promise made by offeror, requesting something in exchange for that promise. Acceptance is a promise by the offeree to be bound by the exact terms proposed by the offeror.
offeror/offeree
The person who makes the offer is the offeror. The person to whom the offer is made is the offeree.
option
An agreement to keep open for a set period an offer to sell or purchase property.
owner financing
The seller is the primary lender, securing the property by means of a deed, note and mortgage, deed of trust, or contract for deed. in its traditional form, the buyer takes possession of the property and the seller retains legal title until paid in full, but some sate have softened this outcome to provide that the buyer is entitled to legal title after a specified period of successful loan payments.
purchase money mortgage
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.
revocation
Canceling or annulling licensed privileges’ or rights.
specific performance
A legal action to compel a party to carry out the terms of a contract.
statute of limitations
That law pertaining to the period of time within which certain action must be brought to court.
“time is of the essence”
A phrase in a contract that required the performance of a certain act within a stated period of time.
unenforceable contract
A contract that has all the elements of a valid contract, yet neither party can sue the other to force performance of it. For example, an unsigned contract is generally enforceable.
unilateral 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.
valid contract
a contract that complies with all the essentials of a contract and is binding and enforceable on all parties to it. vende
vendee
A buyer, usually under the terms of a land contract.
vendor
A seller, usually under the terms of a land contract.
void contract
A contract that has nto legal force or effect because it does not meet the essential elements of a contract.
voidable contract
A contract that seems to be valid on the surface but may be rejected or disaffirmed by one or both of the parties.
