Real Estate #4

What language may be included in a contract after the assignor's name to make it clear that the contract is assignable?

"And/or assigns"

Gloria Meeker can't believe it. She thought she had a buyer for her home, and at the last minute, the buyer bailed. At least Gloria can keep the earnest money. That's some consolation. What remedy is Gloria pursuing to address her breach of contract situation?

Accept liquidated damages

Nancy Owens finds herself in a breach of contract situation. Although the other party met some obligations, others weren't met. Nancy thinks it would cost more time and money to sue than it would to just accept the work that's been done and call it good. What remedy is Nancy going to pursue to address her breach of contract situation?

Accept partial performance

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ____________

Accepting liquidated damages

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ___________

Accepting partial performance

Which of the following scenarios describes an example of unilateral rescission?

Bobby, the buyer, makes an offer on a house that doesn't meet the appraisal contingency. He cancels the sale.

When a buyer breaches the real estate sale contract, the seller may file a lawsuit for compensatory damages. Which of the following best describes compensatory damages?

Compensation for actual loss based on the contract's value.

Miguel and Tina have a signed contract for Tina to buy Miguel's house. The original contract form is a mess. Tina spilled coffee on it, obliterating some of the text. Tina and Miguel have crossed out and initialed several changes. They decide to write a new contract that cleans up the coffee spill and incorporates all their changes.

Novation

Two couples, Jill and John and Josie and Jack, decide to enter into a timeshare agreement. When Josie gets cold feet about it, Jack ditches her and instead becomes a couple with Lourdes. Everyone agrees that Lourdes can replace Josie in the timeshare agreement, and Josie no longer will have any liability.

Novation

Breach Of Contract

One or more parties fail to meet the terms of their agreement Ex. When Caleb failed to turn over the keys to his house to Susan after the transaction closed, she sued him for breach of contract.

Which of these constitutes a breach of contract?

One party fails to meet the obligations of the contract.

Sissy Redcap's litigious-happy grandmother coerced her into signing a contract that stated that Sissy would visit her grandmother every day and bring along a basket of goodies. In return, Sissy would receive a grandmotherly hug. After a week of visiting her grandmother, Sissy said, "The heck with this!" and played with her new friend, Winnifred Wolfe.

Partial performance

One day, Herman Yolk and his wife, Imelda, bought a goose. The pair entered into a contract with the goose that stated that as long as the goose continued to lay golden eggs each day for a month, the couple would not have the goose for dinner. The goose laid a golden egg each day for one month, and the Yolks ordered takeout.

Performance of a contract

Select the correct definition for "reformation of a contract."

Redrafting a contract

Which of these accurately defines the term 'reformation'?

Redrafting a contract

Buyer Trina is unexpectedly transferred overseas, so she has to cancel her contract to Lori's house. Lori agrees.

Release

Abbie learns the seller has no legal right to sell the house she's buying because his aunt actually owns it. Abbie cancels the contract.

Rescission

There's no way she's letting guys from that same company back onto her property to mess it up even more. She's taking this to court, by golly! What remedy is Agnes pursuing to address her breach of contract situation?

Sue for damages

Mark Strong thought he had bought and closed on a nice bit of property, but the seller has refused to deliver the title to him. Mark met his obligations per his written contract with the seller, and the seller met all but one-handing over the title. Mark isn't going to let the seller get away with this. He's going to get his title, even if it means going to court. What remedy is Mark pursuing to address his breach of contract situation?

Sue for specific performance

Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty's basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of _______

Suing for damages and breach of contract

Which of these choices describes novation?

The rights and obligations of an original party to an existing contract are taken by another party, creating a new contract.

Which of these correctly describes the Statute of Limitations as it applies to real estate?

There is a limit to the time in which a wronged party (buyer or seller) can initiate a court action.

Jack Nimble and Jill Quick entered into an agreement to open a candlestick shop. True to her name, Jill completed everything she needed to do to meet her part of the contract well within the agreed upon time frame. Jack, on the other @ land, didn' jump to it, and his failure to meet deadlines caused the two to lose the store.

Time is of the essence

Which of these is the best meaning for "assignment of contract"?

To substitute a new party for one of the original parties stated in the contract

True or False: In the event that the new party fails to live up to the obligations stated in the contract, the original party remains responsible to the terms of the agreement unless specifically stated otherwise in the contract.

True

True or False: When assigning a contract, the assignor should also check off any "contract is assignable" clause that is part of the purchase contract.

True

Rick Tynes is tired of waiting for his subcontractor to get his part of the deal done. The agreed-upon deadlines have come and gone, and Rick is losing money waiting for the subcontractor to come through. If the subcontractor isn't going to honor his commitments, neither is Rick. There's no point in throwing good money after bad by suing the subcontractor. He's just going to consult with his attorney and then terminate this contract and be finished with the whole ordeal. What remedy is Rick pursuing to address his breach of contract situation?

Unilaterally rescind the contract

In contract law, when does partial performance occur?

When a party does some, but not all, of what the party has agreed to do

Liquidated damages

Damages agreed to be paid in a contract Ex. Often, the earnest money deposit of a buyer is used as liquidated damages for the seller in the case of buyer default.

True or False: The request to assign a contract is most often made prior to an offer being made to purchase the property.

False

What does "performance of a contract" mean?

Meet all of the terms of a contract.

Partial Performance

Meeting some, but not all terms of a contract Ex. Although he met all other terms of the contract, Jeffrey failed to meet his contractual deadline; the other party could rescind the contract based on his partial performance.

The buyers couldn't come to an agreement with the seller about non-safety-related items found during the home inspection that the buyers wanted to be fixed, but that the seller wasn't willing to address. Having arrived at an impasse with neither party willing to negotiate, the parties agreed to cancel the contract. What remeay are the buyers and the seller pursuing for their breach of contract situation?

Mutually rescind the contract

Your seller client signed a contract with a buyer, but the buyer now wishes to back out of the contract and has offered to have a friend take his place as buyer through the process of novation. Your seller client is agreeable. Since everyone agrees, is it okay for you to cross out the original buyer's name on the contract ¿and substitute the new buyer's name?

No

When a breach of contract occurs, the aggrieved party can remedy the situation in four of these ways. What options does the wronged party have?

1. Accept partial performance 2. Sue for specific performance 3. Sue for damages 4. Mutually rescind the contract

The dictionary says 1.___________ is an improvement or amendment of what is wrong, corrupt, or unsatisfactory. You could use the synonyms 2._______ or revision. In real estate, both parties may agree to reform the contract in the case of a 3._________ In the case of 4.___________, one party may sue the other to correct the contract.

1. Reform 2. Correction 3. Mistake 4. Fraud

Which three of the following statements indicate who has the right to terminate a breached contract?

1. The innocent party can terminate the contract. 2. Both parties can agree to terminate the contract. 3. The guilly party can terminate the contract with aggrieved party's permission.

Specific Performance

An order by the court that the parties must complete the contract as originally agreed Ex. Developer Don agreed to sell Lot 71 to Barry. Then he decided to hold Lot 71 out, and offered to substitute lot 70. Barry wants Lot 71. Every piece of real estate is unique. Even if the two lots are identical in value, Don cannot substitute lots.

Nora and her husband, Tom, have made a back-up offer on the home of their dreams, which is accepted. A week later, they're told that the first offer is going to closing. Nora and Tom make an offer on another home.

Not Novation

Myra and Michelle have decided to buy a townhome and have entered into a contract with Hugh Dent, the seller. After reviewing her finances, Michelle gets cold feet, leaves Myra a note, and leaves town. Myra can't afford the place on her own and has to terminate the contract.

Not novation

What does the phrase "time is of the essence" mean with regard to a real estate contract?

The parties agree to proceed in good faith and not unduly delay the process.