Chapter 11

Damian enters into a contract to sell his home to Lori, who puts down a $5,500 earnest money deposit. At the last minute, Lori backs out of the deal. Damian keeps the earnest money deposit. Of what is this an example?

Accepting liquidated damages

What is forbearance?

An agreement not to act

Mary agreed to buy her mother's house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can't come up with the agreed-upon funds. What's happening in this scenario?

Assignment

Which of the following elements is always required for a real estate contract to be valid?

Consideration

A contract in which the parties trade a promise for a promise is ______.

Bilateral

A contract that requires both parties to act is a ______ contract.

Bilateral

What type of contract do you have once the seller has accepted the buyer's offer in writing and the buyer has been notified of the acceptance?

Enforceable

Which type of contract won't stand up in court?

Unenforceable

in contract law, undue influence differs from duress in that duress includes ______.

Use or threat of force

Aubrey, an attorney for the seller, was extremely satisfied with the purchase offer his client was planning to sign. The sales contract contained all of the essential elements. What type of contract is this?

Valid

The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have?

Executed

Which of the following is true of an express contract?

It stated specifically

Which one of the following statements is true about a sales contract that's been signed by both parties, and both parties have been notified of its acceptance?

It's a legally binding contract.

What makes a binder a valid contract?

It's in writing, signed by all parties, and communicated to the offeror.

In contract law, a "legally competent" party is a party who has the ______ to enter into a contract

Legal and mental capacity

Lena's buyer client Mindy is making an offer on Joe's house. Which party decides how much earnest money to offer?

Mindy

Mary contracted to buy her mother's house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother's agreement, Mary's sister, Tina, steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What's happened here?

Novation

Parker entered into a contract with seller Derrick to buy Derrick's home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick's home, but his brother, Tom, agreed to take Parker's place as the buyer in the purchase contract. Of what is this an example?

Novation

What is a binder?

a written outline of the sale transaction

Bryce is tired of waiting for his subcontractor to get his part of the deal done. The agreed-upon deadlines have come and gone, and Bryce is losing money waiting for the subcontractor to meet his obligations. If the subcontractor isn't going to honor his commitments, neither is Bryce. He decides to consult with his attorney and then terminate the contract. Of what is this an example?

Rescinding the contract unilaterally

In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with full understanding of the contract terms?

consent

A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract.

mentallly

The ______ permits oral evidence to complete an otherwise incomplete or ambiguous written contract.

parol evidence rule

Camilla is her father's legal guardian because he suffers from a mental illness. Her father would like to buy a luxury condo, but Camilla tells him he can only afford a modest condo. In reality, Camilla's father can easily afford a luxury condo, but she hopes to transfer his extra money into her personal accounts. Her father trusts Camilla, and he enters into a contract to buy a modest and inexpensive condo. This is an example of ______.

undue influence

In Georgia, a party to a contract has ______ from the date of a contract breach to sue the other party.

6 years

Jack and Al, who are neighbors, enter into an agreement not to permit their real estate agents to sell their homes to families of color. This agreement lacks ______, so it's void.

A lawful objective

The Nettles have accepted the Briars' purchase offer, and both parties have signed the sales contract. What type of contract do the Nettles and the Briars have?

Executory

The Uniform Vendor and Purchaser Risk Act clarifies the rights granted to whom?

The buyer and the seller