Real Estate Chapter 10 Real Estate Contract Law Flashcards

Real Estate Chapter 10 Real Estate Contract Law Flashcards contractan agreement between two or more parties, who in a "meeting of the minds", have pledged to perform or refrain from performing some act.NovationSubstituting a new obligation for an old one or substituting new parties to an existing obligation Sufficient ConsiderationEnough Consideration to make a contract binding; grossly insufficient consideration would be $50,000 for a property valued at $2 million Statute of Fraudsa state statute that requires certain types of contracts to be in writing to be enforceable; lease of 1 year or less is not required to be in writing to be enforceable; concerns enforceability not validity counter offervoids first offer and creates new offer; changing any of the terms in the offer received.competent partiesmust have the capacity to contract; legal age, mental competency, legitimate authority Unliquidated damagesThe amount of valuable consideration awarded by a court to an injured party as a result of default when a contract does not specify a certain amount rejectionRefusal by the offeree Forfeiturethe loss or giving up of something according to terms of agreement, as a penalty for breach of contract; buyer who breaches contract may have to forfeit earnest money as a penalty broker-lawyer accordsLaws that define what type of contracts brokers and agents may pepare; some states they may not draft contracts, but may compete preprinted forms; may not complete leases, mortgages, contracts for deed, or promissory notes to which they are not a party cancellation and dischargetermination of a contract Valid Contractone that is legally binding and fully enforceable by virtue of meeting certain requirements of law; in writing and enforceable within a statutory time period lapse of timeexpiration provision and date in a contract; stated time period after which an offer terminates. If no time is stated, an offer terminates after a reasonable time legal remedies for defaultrescissionforfeituresuit for damagessuit for specific performance Suit for Specific Performancean attempt to force the defaulting party to comply with the terms of the contract; occurs when it is difficult to identify damages because of the unique circumstances of the real

property in question mutual consentoffer 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

OfferorA person who makes an offer Infeasibilitynot possible to perform Time is of the essenceA phrase in a contract that requires the performance of a certain act within a stated period of time or expires at exactly the time specified implied contractunstated or unintentional agreement that may be deemed to exist when the actions of any of the parties suggest the existence of an agreement; paying rent witha check after lease expires and landlord cashes it validity of a conveyance contractmust be in writing; contain a legal description; be signed by one or more parties cooling periodstatutory amount of time parties to a contract are allowed to rescind without cause Valid but unenforceablecertain oral contracts; if performed, cannot change outcome; oral lease exceeding 1 year Offereeperson to whom the offer is made Statute of Limitationsrestricts the time period for which an injured party in a contract has the right to rescind or disaffirm the contract RescissionA remedy whereby a contract is canceled and the parties are returned to the positions they occupied before the contract was made, including refunding of any money transferred Revocation of OfferIf the offeror communicates to the offeree that the offeror no longer wishes to be bound to the offer, then the offer is terminated. May be revoked or withdrawn at any time BEFORE the offeree has communicated acceptance Voidable Contractagreement that initially appears to be valid, but is subject to rescission by a party to the contract who is deemed to have acted under some kind of disability; only the party with the disability may rescind the legal effect of the contract oral contractAn agreement that is not in writing or signed by the parties; also referred to as a parol contract; not enforceable for leases exceeding 1 year Suit for damagescivil suit for money damages not covered by contract; suit must be filed during time period allowed by the statute of limitations Executed ContractA contract that has been completely performed by both parties; neither party bears any further obligation Liquidated DamagesAn amount predetermined by the parties to a contract as the total compensation to an injured party should the other party breach the contract AcceptanceThe offeree's expression of agreement to the terms of the offer. The power of acceptance is created by a valid offer.Sign and date offer upon acceptance; offeree accepts offer, converting it to a contract