Unit 11 - Real Estate Contracts Flashcards
Assignment
The transfer in writing of interest in a bond, mortgage, lease, or other instrument.
bilateral contract
A bilateral contract is one where there is a promise for a promise. Sales contracts and listings are examples of bilateral contracts. In a listing contract, the seller promises to pay if the agent promises to procure a purchaser.
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.
Commingling
The illegal act by a real estate licensee of mingling client or customer funds with the licensee’s personal funds.
Consideration
(1) That received by the grantor in exchange for his deed. (2) Something of value that induces a person to enter into a contract.
Contingency
A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes binding.
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. See also unilateral contract and bilateral contract.
Conversion
The wrongful appropriation of property belonging to another (i.e. earnest money); also, the process of changing a property’s status from rental to condominium.
Counteroffer
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.
Earnest Money
Money deposited by a buyer under the terms of a contract. It may be forfeited if the buyer defaults but applied to the purchase price if the sale is closed.
Equitable Title
The interest held by a vendee under a contract for deed or an installment contract; the equitable right to obtain absolute ownership to property when legal title is held in another’s name.
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.
express contract
An express contract is an exchange of promises where terms by which the parties agree to be bound are declared either orally or in writing, or a combination of both, at the time it is made.
Implied Contract
A contract under which the agreement of the parties is demonstrated by their acts and conduct.
Land Contract
A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until all payments are received in full. Also called a contract for deed or an articles of agreement for warranty deed.
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.
Novation
Substituting a new obligation for an old one or substituting new parties to an existing obligation.
Offer And Acceptance
Two essential components of a valid contract; a “meeting of the minds.”
Option
An agreement to keep open for a set period an offer to sell or purchase property.
Specific Performance
A legal action to compel a party to carry out the terms of a contract.
Statute Of Frauds
The part of a state law that requires that certain instruments, such as deeds, real estate sales contracts, and certain leases, be in writing to be legally enforceable.
Time Is Of The Essence
A phrase in a contract that requires 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.
