Unit 7: Contracts Flashcards
Contract
Agreement to do something or not to do something
Executory Contract
A contract that remains to be done
Executed Contract
A contract when all obligations have been performed
Express Contract
A contract of words is established by an oral or written agreement in which parties declare their intention to make a contract.
Implied Contract
Established by the conduct of the parties, without specific oral or written agreement.
Bilateral Contract
A promise for a promise (Most contracts- Including Real Estate)
Unilateral Contract
A promise for an act (Reward sign for lost dog)
Void Contract
A contract that has no legal effect from its inception. An agreement to do something illegal is void.
Voidable Contract
A contract that may be disavowed by one or both parties, depending on the circumstances. An example of a voidable contract is one that someone signs while intoxicated.
Unenforceable Contract
Valid on its face, but its enforcement would violate some law.
5 elements of a contract
- Legal Capacity or capable parties
- Mutual Consent ( offer and acceptance)
- Lawful Object- Subject matter of contract cannot be illegal.
- Consideration- Something of value must be exchanged.
- Must be Written (certain instances if on the statute of frauds)
Legal Capacity (Capable Parties)
- Cant be Minors- Under 18- unless married, divorced, or widowed
- Cant be Persons judicially declared of unsound mind
- Cant be Currently Incarcerated
Mutual Consent (offer & acceptance)
A contract is not created until the parties show that they have given their mutual consent to its terms.
Offers and Counteroffers Can be:
Revoked prior to acceptance unless it was supported by consideration.
Lawful Object
Subject matter must contain a lawful object. Cannot be something illegal.
Consideration
Anything of value exchanged in a contract
Statute of Frauds
Part of the California Civil Code originated in the English common law. It lists the types of contracts that must be in writing.
Discharging a contract
- Performance
- Rescission- Both parties agree to rescind
- Release
- Novation- substitute agreement
- Reformation
- Assignment
- Breach
A 17-year-old can contract as an adult if she:
is emancipated
The owner of a one-person shoe repair shop is
A sole proprietor
Mary persuaded her elderly Aunt Agnes to buy a grossly overpriced condominium. Mary Knew the price was too high, but she received a commission on the sale from the seller. Aunt Agnes may complain of:
Actual fraud and undue influence.
Can a broker enforce an oral listing agreement for his neighbor’s home?
No
When both parties agree to cancel a contract they effect:
A rescission
Todd made an offer for the Brown residence and the Browns accepted the offer. On reconsidering, Todd decided to back out of the deal, and the Browns agreed to let him do so. Todd and the Browns then signed:
An agreement rescinding the purchase contract
Lonnie and Karen have a contract to buy the Santos house. Following a four-day rainstorm, the Santos house was pushed off its foundation by a mudslide and is now resting about halfway over a ravine. The contract probably is:
discharged because performance is impossible.
If a buyer’s performance of her sales contract becomes economically impractical, she should:
Ask that the contract be terminated.
Failure to perform a contract is
A breach
Drew signed a contract to sell his farm to George. Drew had second thoughts and refused to sell, but the sale went through anyway. How did this happen?
George received a court order for specific performance of the contract.
The time period in which a lawsuit can be brought is set by:
The statute of limitations.
The statute of limitations for an action based on a written real estate contract is:
4 years
The rule for preprinted contracts is:
Handwriting takes precedence over both typing and printing.
A property description including the words “250 acres, more or less” is:
Sufficient if reasonably close to the exact acreage.
