An important legal feature of a contract is
it represents a "meeting of the minds.
According to contract law, every valid contract is
also
enforceable or unenforceable
The guardian for a mentally incompetent party
enters into an oral contract with another party to buy
a trade fixture. This contract
is possibly valid and enforceable
A prospective home buyer submits a signed offer to
buy a house with the condition that the seller pays
financing points at closing. The seller disagrees,
crosses out the points clause, then signs and returns the document to the buyer. At this point, assum
still an offer.
As part of a construction contract between a
contractor and a buyer, the contractor promises to
complete construction by December 20. This
promise can be construed as
valuable consideration.
An unscrupulous investor completes a contract with a
buyer to sell a property the investor does not own.
The sale contract for this transaction
void
A homeowner encourages an agent to aggressively
persuade a buyer to purchase his house by
over inflating historical appreciation rates. The agent
and the seller agree that 25% annual appreciation
would work, even though this figure is four times
actual ra
voidable
The statute of limitations requires that parties to a
contract who have been damaged or who question
the contract's provisions
must act within a statutory period
The purpose of the statute of frauds is to
require certain conveyance-related contracts to
be in writing.
A seller immediately accepts a buyer's offer but
waits eight days before returning the accepted
document to the buyer. Meanwhile, the offer has
expired. Which of the following is true?
The buyer has no obligations to the seller
whatsoever.
A buyer agrees to all terms of a seller's offer except
price. The buyer lowers the price by $1,000, signs
the form, and mails it back to the seller. At this
point, the seller's offer
is void.
A buyer submits an offer to a seller. Two hours
later, the buyer finds a better house, calls the first
seller, and withdraws the offer. Which of the
following is true?
The original offer is legally extinguished.
Real estate contracts that are not personal service
contracts
may be assigned.
Which of the following contracts must be in writing
to be enforceable?
A two-year lease.
A good example of a unilateral contract is
an option to purchase
A contract may be defensibly terminated without
damages if
it is impossible to perform
A contract is discharged whenever
it is performed
A landlord suddenly terminates a tenant's lease in
violation of the lease terms. The tenant takes action
to compel the landlord to comply with the violated
terms. This is an example of a suit for
specific performance.
cashier's check
check issued by the bank
certified check
personal check certified that the funds are in the account
closings
dates on which the parties agree to perform all the promises of the contract
condition precedent
terms of the contract that must be satisfied before one or both of the parties are required to perform their contractual obligations
consideration
something of value given to make the promises in a contract enforceable
contract
agreement between two or more persons consisting of a promise or mutual promises that the law enforced
earnest money
money paid by the purchaser at the time the real estate contract is signed (token deposit money placed in trust)
execution
signature of a party to a legal document
express authority
authority that has clearly been given by a principal to a agent
fiduciary
person who hold a relationship of trust, good faith and loyalty
implied authority
things necessary and proper for an agent to carry out the duties of an agency
liquidated damages
amount of money agreed on by the parties to a contract to be the damages in the event of a default of the contract
listing agreement
a agreement entered into between an owner and a real estate broker to assist the owner in selling real property
option
a contract where the optionee have the right to buy the owners real property at a fixed price within a certain time on agreed terms and condition
parole of evidence rule
the written agreement is the only evidence of the agreement between parties and that any oral testimony are not permitted
power of atty
written document authorizing another person to act as one's agent
principal
person who hires an agent to act on his or her behalf
rescission
status quo getting back to where everyone was before the contract was broken
seller disclosure form
informs the buyer about all known physical conditions on the property and its improvements
specific performance
requires a defaulting party to perform the promises under the contract
time is of the essence
provisions contained in a contract that requires strick performance of the contract by the date or dates provided
A court may construe the legal status of a contract in one of four ways:
- Valid
- Valid but unenforceable
- Void
- Voidable
Capacity to contract is determined by three factors:
- Legal Age
- Mental Competency
- Legitimate Authority
Mutual Consent
Also known as offer and acceptance and meeting of the minds, requires that a contract involve a clear and definite offer and an intentional, unqualified acceptance of the offer
A contract is thus voidable if one party acted under
Duress, Coercion, Fraud, or Misrepresentation
A contract that conveys an interest in real estate must
- be in writing
- contain a legal description of the property
- be signed by one or more of the parties
Statute of Limitations
Restricts the time period for which an injured party in a contract has the right to rescind or disaffirm the contract.
Statue of Frauds
Requires that certain contracts must be in writing to be enforceable
Any of the following actions or circumstances can terminate an offer:
- Acceptance: the offeree accepts the offer, converting it to a contract
- Rejection: the offeree rejects the offer
- Revocation: the offeror withdraws the offer before acceptance
- Lapse of time: the offer expires
- Counteroffer: the offeree changes the
Express Contract
all the terms and covenants of the agreement have been manifestly stated and agreed to by all parties, whether verbally or in writing.
Implied Contract
an unstated or unintentional agreement that may be deemed to exist when the actions of any of the parties suggest the existence of an agreement.
Bilateral Contract
both parties promise to perform their respective parts of an agreement in exchange for performance by the other party.
Unilateral Contract
only one party promises to do something, provided the other party does something. The latter party is not obligated to perform any act, but the promising party must fulfill the promise if the other party chooses to perform.
Executed Contract
one that has been fully performed and fulfilled: neither party bears any further obligation.
Executory Contract
one in which performance is yet to be completed.
Revocation
Cancellation of the contract by one party without the consent of the other
Abandonment
Occurs when parties fail to perform contract obligations. This situation may allow the parties to cancel the contract.
Lapse of Time
If a contract contains an expiration provision and date, the contract automatically expires on the deadline.
Invalidity of contract
If a contract is void, it terminates without the need for disaffirmation.
The damaged party may elect the following legal remedies:
- Rescission
- Forfeiture
- Suit for damages
- Suit for specific performance
Suit for specific performance
An attempt to force the defaulting party to comply with the terms of the contract.