Unit 7- contracts

executory contract

A contract that has not yet been fully performed. Ex: a listing agreement

Voidable Contract

An agreement that may be terminated by one of the parties. Ex: if one party signs while under the influence.

Void Contract

One that has no legal effect from its inception

Undue

strong enough persuasion to completely over power the free will of another and prevent him or her from acting intelligently and voluntarily, as in the case where a broker guilty of blockbusting has induced someone to sell in fear of change in the racial character of the community.

Affirmative fraud

when it is a deliberate statement of a material fact that the speaker knows to be false and on which the speaker intends another person to rely, to that person detriment.

Negative fraud

when it is deliberate concealment of something that should be revealed.

Impractibility of Performance

when performance has been rendered excessively difficulty or harmful by an uncontrollable event. If a buyers financial condition takes a down turn, stock in company plummets and purchase would cause economic hardship.

When speaking about contract obligations, the word "execute" means A. Signing of the document B. Death of one party to the contract C. Performance of contract obligations D. Cancellation of the contract prior to performance

C.

an action based of judgement be brought with in

10 years

an action based on oral agreement ( such as lease for only a few months)

2 years

an action based on fraudulent be brought with in ______ years with in the discovery of fraud

3

an action based on written instrument (such as real estate stales contract)

4 years

a lawsuit to recover title to real property must be brought with in

5 years

A contract that has no legal effect from its conception is A. void contract B. voidable contract C. quasi contract D. valid contract

A

A contract that is a promise for a promise is known as a A. bilateral contract B. voidable contract C. unilateral contract D. void contract

A

Express Contract

A contract of words established by an oral or a written agreement

Implied Contract

A contract that comes about simply from actions of the parties.

Executed Contract

A contract that has been completely performed by both parties.

impossibility of performance

A doctrine under which a party to a contract is relieved of his or her duty to perform when performance becomes impossible or totally impracticable (through no fault of either party). An unexpected disability and job loss.

Unenforceable Contract

A valid contract rendered unenforceable by some statute or law. Example if the contract is only oral and needs to be written. Or a contract signed in duress, such as threat of harm.

a counteroffer by the seller A. creates a brand new offer that replaces the buyers original offer. B. amends the original offer from the buyer, essentially adding to it. C. accepts the original offer and starts a back-up offer D. rejects the original offer and bars that buyer from submitting future offers.

A.

tender

An offer to do what you have agreed to do under the terms of a contract

The typical real estate purchase agreement is A. a unilateral contract B. a bilateral contract C. an implied contract D. a voidable contract

B

Which of the following is an example of actual fraud? A. an inadvertent commission of material fact by a subcontractor (termite company) B. A promise made with out any intention of performing it. C. An unfulfilled promise to hold a certain number of open houses with out deliberate intent to deceive. D. An accidental slip of the tongue with out the intent to deceive

B.

in most cases an offer may be revoked A. prior to close of escrow B. before it is accepted, as long as the revocation is communicated directly to the offeree C. at any time, for any reason, as long as the revocation is in writing. D. at anytime as long as consideration has changed hands.

B.

to be enforceable , a real estate sales agreement must A. contin a granting clause B. be in writing C. be acknowledged D. be recorded

B.

According to the statitute of limitations an action based on written real estate sales contract mist be brought with in A. five years B. four years C. three years D. one year

B. four years

What is it called when one person is substituted for another in a contract? A. redaction B. novation C. subordination D. hypothecation

B. novation

Bilateral Contract

Both parties make a promise to do something or refrain from doing something and both are obligated to perform.

contract that has yet to be performed is known as A. Executed contract B. Express contract C. implied contract D. executory contract

D

Both parties to a contract wish to terminate their agreement, restoring them to their original positions. this is called A. release B. no action C. breach D. rescession

D.

Which of the following types of contracts must be in writing under the statute if frauds? A. listing agreement B. an agreement that will not be completed with in one year C. a leas of real property for more than one year D. all of the above

D.

Fin an exclusive authorization and right to sell listing "does not contain a complete legal description, A. the listing is void. B. it is a violation of the real estate law C. the listing is unenforceable D. None of the above

D. A complete legal description is not required for a listing however, the description must be adequate, clear, and ambiguous.

Actual Fraud

Intentional misrepresentation or concealment of a material fact; when a person actively conceals material information or makes statements known to be false or misleading. ALSO CALLED: Deceit.

What are the elements of a valid contract?

Legal capacity offer by one party and acceptance of that offer Lawful object Some sort of consideration or payment May have to be written

Unilateral Contract

Only one party promises, and only that party is obligated to perform.

contract

Promise made by one person to another to do something or to refrain from doing something.

novation

Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Rescission

The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions. Contracts may be rescinded due to mistake, fraud, or misrepresentation. There is no need to show any money damage.

Constructive Fraud

a misrepresentation made without fraudulent intent.

A contract signed under duress is A. Void B. Voidable C. illegal D. Enforceable

b. voidable

contractual obligations

duty of care established by the presence of an expressed or implied contract