Contract
a voluntary agreement or promise between legally competent parties, supported by legal consideration, to perform some legal act
Contract Law
The general body of law that governs such agreements
Express Contract
when the parties state the terms and show their intentions in words, may be oral or written
Statute of Frauds for contracts
Contracts must be in writing in order to be enforceable by court of law
Implied Contract
the agreement of the parties is demonstrated by their acts and conduct
Bilateral Contract
Bother parties promise to do something; one promise is given in exchanged for another. Real estate contracts
Unilateral Contract
a one-sided agreement, on party makes a promise to induce a second party to do something
Executed Contract
all parties have fulfilled their promises of the contract
Executory Contract
one or both parties still have an act to perform
Offer and Acceptance
Mutual Assent: in writing, one party makes and offer and it is accepted by the second party, Offeror and Offeree
Offer
a promise made by one party requesting something in exchange for that promise
Counteroffer
a new offer that voids the original offer after rejection. any change in the last offer may result in a counteroffer
Acceptance
The seller agrees to the original offer or a later counteroffer exactly as it is made and signs the document. a copy is given to each party
Consideration
something of legal value offered by one party and accepted by another as an inducement to perform or refrain from performing some act
Reality of Consent
a doctrine that states a contract must be entered into as the free and voluntary act of each party
Legal Purpose
a contract must be for legal activity
Valid
when a contract meets all the essential elements that make it legally sufficient or enforceable
Void
when a contract has no legal force or effect because it lacks some or all of the essential elements of a contract
Voidable
when a contracts seems valid on the surface but may be rescinded or disaffirmed by one or both parties based on some legal principle
Unenforceable contract
a contract may seem valid but neither party can sue the other to force performance
Time is of the essence
the contract must be performed within the time limit specified
Assignment
a transfer of legal rights or duties under a contract,
Novation
A substitution of a new contract for an existing contract
Breach of Contract
a violation of any of the terms or conditions of a contract without legal excuse
Specific performance
when a seller breaches a contract the buyer may sue to force contract to complete, pay for damages, or rescind
Liquidated damages clause
permits the seller to keep earnest money deposit and any other payments received from the buyer if he defaults
Statute of Limitations for Time
You must file suit within 5 years of oral agreement or 10 years of written agreement
1966 Chicago Bar Association v. Quinlan and Tyson
Licensees can only fill in blanks on printed form contracts, they cannot give legal advice, cannot fill in later, must give true copy within 24 hours
listing agreement
establishes the rights and obligations of the sponsoring broker as agent and the seller as principal
Buyer agreement
Establishes the relationship between as buyer as a principal and sponsoring broker as agent
Bill of Sale
The way a title of personal property is transfered
Earnest Money
a monetary deposit that is evidence of the buyer's intention to carry out the terms of the contract in good faith, held in escrow, reasonable amount, seller's property as liquidated damages if default
Commingling
mixing funds with funds in escrow accounts
Conversion
using escrow funds for personal use, illegal
Equitable Title
The interest of the land that is bought on contract
Uniform Vender and Purchaser Risk Act
states that the seller bears any loss that occurs before the title passes or the buyer takes possession
Liquidated Damages
Amount of money that will compensate the nonbreaching party to avoid lawsuit
Contigencies
additional conditions that must be satisfied before the sales contract is fully enforceable
Amendment
change to an existing contract that is signed or initialed by all parties
Addendum
any provision added to an existing contract without altering the content of the original
option
optionee has the right to buy or lease the owner's property at a fixed price within a certain period of time, not a sales contract, unilateral
land contract
contract for deed, installment contract, articles of agreement for warranty deed - the seller retains legal title and the buyer gets equitable title to the property