Real Estate Contracts

What is an agreement between two legally competent parties?

A contract

How can a contract be valid but unenforceable?

A contract for the sale of real property can be oral, or valid, but unenforceable in court if either parties decide to back out.

The "A" in CALL stands for _____.

Agreement

Contract

An agreement between two parties to do something or not to do something.

The word to use to remember the requirements for a valid contract is ______.

CALL

A promise to deliver a service is called _____.

Consideration

In a home sale, the seller promises to give his home to the buyer and the buyer promises to give him money. This is known as _____.

Consideration

The "C" in CALL stands for _____.

Consideration

Forcing someone to do something against his/her will in the execution of a contract is called _____.

Duress

A contract in which the parties specifically state their intent to enter into an agreement is called a(n) _____ contract.

Expressed

A seller is aware that the roof of her house leaks but conceals this from the buyer. This would probably be a case of _____.

Fraud

An act intended to deceive someone in order to get him/her to give up something of value is called _____.

Fraud

Intentionally withholding relevant information about real property from a buyer is _____.

Fraud

A contract which is created by the acts of the parties is called a(n) _____ contract.

Implied

A contract which is neither written nor oral is a(n) _____ contract.

Implied

The "L's" in CALL stand for legal objective and _____.

Legally Competent Parties & Legal Objective

The party who makes an offer is called the _____.

Offeror

A verbal contract is called a(n) _____ contract.

Parol

A sales bonus offered to salespersons by a company is a(n) _____ contract.

Unilateral

A contract in which only one party promises to give up something is called a(n) _____ contract.

Unilateral contract

Uneforceable contract

a contract that cannot be enforced in a court of law An unenforceable contract is valid until challenged in court.

Consideration

a promise that someone makes to give up something of value.

Enforceable Contract

a valid contract that can be enforced in a court of law

Contract for forbearance

an agreement not to do something

Parol Contract

an oral agreement

A real estate sales contract is a(n) _____ contract.

bilateral

A contract in which both parties promise to give up something is a(n) _____ contract.

bilateral contract

The last requirement in the process of offer and acceptance is _____.

communication of acceptance

When an offeree rejects an offer and becomes an offeror, the immediate result is a(n) _____.

counteroffer

In reaching an agreement through the process of offer and acceptance, the buyer can be _____.

either the offeror or offeree

In reaching an agreement through the process of offer and acceptance, the seller can be _____.

either the offeror or offeree

A contract for which all requirements have been fulfilled and the parties have done what they agreed to do is called a(n) _____ contract.

executed

A real estate sales contract which has been closed is a(n) _____ contract.

executed

A contract for which some or all requirements have not yet been completed is a(n) _____ contract.

executory

A real estate sales contract which has not closed yet is a(n) _____ contract.

executory

A contract which is either written or oral is a(n) _____ contract.

expressed

A real estate sales contract is a(n) _____ contract.

expressed

A sales bonus offered to salespersons by a company is a(n) _____ contract.

expressed

A contract that specifies that something NOT be done is called a contract for _____.

forbearance

Love, affection, and good will are examples of _____ consideration.

good

Something of worth promised in a contract that doesn't have a monetary value is called _____ consideration.

good

The giving of incorrect information without the intent to deceive is called _____.

innocent misrepresentation

Valid Contract A valid contract can be either enforceable or unenforceable:

is legally sufficient and meets all the requirements of the law

A requirement for a valid contract known as mutual agreement is also called a _____.

meeting of the minds

An error in the facts of a transaction that occurs mutually by both parties is called _____.

mistake

Offer and acceptance are required in order to have _____.

mutual agreement

The party to whom an offer is made is called the _____.

offeree

An unenforceable contract is often a contract that is _____.

oral

In the case of innocent misrepresentation, the buyer has the option to _____.

rescind the contract

When fraud occurs, the injured party has the option to _____.

rescind the contract

When a counteroffer is made, the original offer is _____.

terminated

Implied Contact If you order food in a restaurant, your actions (ordering the food) imply a contract on your part to pay. The acceptance of the order by the waiter implies that the restaurant will deliver food in return for your money.

the intent of the parties is not stated but is indicated by their actions

Expressed Contract An expressed contract can be either written or oral. A contract to sell real estate is an expressed contract since the intent of the seller to sell and the buyer to buy is stated in the contract. A verbal lease on an apartment for 3 months is an expressed contract since the parties verbally state their intent.

the intent of the parties is stated (expressed) in the contract itself

In a real estate contract the consideration given by the buyer is a promise of _____.

the purchase price

Taking advantage of someone in the execution of a contract is called _____.

undue influence

Once an offer is made, it can be withdrawn _____.

until acceptance is communicated

A contract that is voidable but has not yet been rescinded is _____.

valid

A contract that meets all the requirements of the law is called a(n) _____ contract.

valid

From a legal standpoint, there are three types of contracts:

valid void voidable

A contract that will stand up in court is _____.

valid and enforceable

Anything that has monetary value when promised in a contract is called _____ consideration.

valuable

A contract that does not meet legal requirements and is not binding on either party is _____.

void

A contract which does not have a legal objective is _____.

void

In the case of a mistake in material fact resulting in no mutual agreement, the contract is _____.

void

A contract made by a person who was intoxicated is typically _____.

voidable

A contract that is binding on only one party is _____.

voidable

A contract which can be rescinded by one party is _____.

voidable

If a contract is signed under duress or undue influence, the resulting contract is _____.

voidable

Most contracts with minors are _____.

voidable