section 8: Unit 1: Contract Types and Their Legal Effects

A contract in which two parties make promises to each another

bilateral contract

statute of frauds The essential terms and conditions of the contract must be present. a. requirement b. not a requirement

a requirement

You agree to buy a vacant property from a developer for $10,000. a. bilateral b. unilateral

a. bilateral

You'll get a haircut that costs $50. a. bilateral b. unilateral

a. bilateral

Which of the following best explains how the statute of frauds protects consumers? a. It doesn't allow people to own land unless they can afford it. b. It provides requirements that contracts have to meet to be legally enforceable. c. It puts a limit on how much interest financial institutions can charge. d. It states that all real property sales must involve lawyers.

b. It provides requirements that contracts have to meet to be legally enforceable.

You order dinner at a fancy restaurant. Your bill is $500, and you are obligated to pay it. a. express b. implied

b. implied

You sit down for a haircut. When you leave, you stop by the cashier and pay for the service. a. express b. implied

b. implied

A contract in which all terms have been fully completed

executed contract

A contract in which some of the terms have not yet been completed

executory contract

A contract in which the parties to the contract have definitely agreed on all of the contract terms

express contract

A contract that is inferred from the parties' actions

implied contract

A contract that will not stand up in court, but may still be valid if the parties want to complete performance

unenforceable contract

A contract in which only one party makes a promise (to try to get the other party to do something)

unilateral contract

A contract that is binding and enforceable on all concerned parties because it contains all essential contract elements

valid contract

A contract with no legal effect, even when all of the essential elements for a contract exist

void contract

A contract that may or may not be enforceable between the parties, and usually means one party did not meet a legal requirement of the agreement

voidable contract

A written purchase agreement to buy a property, accepted in writing by the seller a. enforceable b. unenforceable

a. enforceable

Chet offers to buy Tina's property for $500,000. His offer includes no earnest money. Tina accepts his offer. a. enforceable b. unenforceable

a. enforceable

You purchase a car from a dealer. You sign a purchase agreement detailing the transaction. a. express b. implied

a. express

You purchase a car from a friend. You offer to pay $8,000. He agrees to the amount. You shake on it. a. express b. implied

a. express

You start a new job. You sign an employee agreement that spells out your salary and benefits package. a. express b. implied

a. express

The contract subject matter must be clearly identified. a. requirement b. not a requirement

a. requirement

statute of frauds The contracting parties must be identified. a. requirement b. not a requirement

a. requirement

A contract may be cancelled for one of a number of reasons a. voidable b. invalid c. void d. valid

a. voidable

A contract that is missing one or more essential elements a. voidable b. invalid c. void d. valid

b. invalid

statute of frauds In addition to the written contract, there must also be an audio recording of an oral agreement between the contracting parties. a. requirement b. not a requirement

b. not a requirement

An oral agreement to purchase a property a. enforceable b. unenforceable

b. unenforceable

You own an "option to buy" on a property that says if you want to buy the place in two years for $20,000, you may. a. bilateral b. unilateral

b. unilateral

You promise to pay a $100 reward if someone returns your phone. a. bilateral b. unilateral

b. unilateral

What does the parol evidence rule state? a. All contracts, commitments and agreements for the sale of real property must be in writing. b. An Agreement of Sale must contain the essential elements of a contract for it to be enforceable. c. In certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract. d. In order for a real estate agreement to be enforceable, it must be in writing and signed by both parties.

c. In certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract.

What's the main point of the statute of frauds? a. Anyone caught committing real estate fraud will be prosecuted. b. Fraudulent behavior won't be tolerated in the real estate profession. c. Real estate purchase and sale contracts must be in writing to be enforceable. d. There's a limitation for how long someone can sue for fraud.

c. Real estate purchase and sale contracts must be in writing to be enforceable.

A contract to do something that is illegal or is a legal impossibility a. voidable b. invalid c. void d. valid

c. void

What is the statute of frauds? a. A symbol of justice that depicts the legal system as always vigilant against deception b. A federal law that requires all acts of fraud to be documented c. An old English law that identified the degree of punishment meted out for acts of forgery d. A law requiring contracts conveying ownership in real property to be in writing to be enforceable

d. A law requiring contracts conveying ownership in real property to be in writing to be enforceable The statute of frauds is a law that requires contracts conveying ownership or interest in real property to be in writing, to be enforceable.

Which of the following describes a contract that exists based not on words, but on the parties' actions or behaviors? a. executed b. executory c. express d. implied

d. implied

A contract that includes all necessary elements and is signed by all parties a. voidable b. invalid c. void d. valid

d. valid