Contracts Key Terms

Net lease

A lease that requires the tenant to pay, in addition to rent, some or all of the property expenses that normally would be paid by the property owner is known as?

Index lease

A lease tied to an index such as the consumer price index is known as what?

Graduated lease

A lease which provides for a graduated change at stated intervals in the amount of the rent to be paid is known as what?

Implied contract

A legal substitute for a contract. An implied contract is an agreement created by actions of the parties involved, but it is not written or spoken. This is a contract assumed to have been drawn.

"As-is"

A legal term used to disclaim some implied warranties for an item being sold is known as what?

"As Is"

A legal term used to disclaim some implied warranties for an item being sold. Denotes that the seller is selling, and the buyer is buying a property in whatever condition it presently exists.

Security Deposit

A monetary deposit given to a lender, seller or landlord as proof of intent is known as what?

Lessee

A person to whom property is rented under a lease is known as?

"Time is of the essence"

A phrase in a contract that means that performance by one party at or within the period specified in the contract is necessary to enable that party to require performance by the other party is referred to as what?

Contingency

A provision in a contract that requires the occurrence of a specific event before the contract can be completed.

Liquidated damages

A provision in certain legal contracts that allows for the payment of a specified sum should one of the parties be in breach of contract is known as what?

Liquidated Damages

A provision in certain legal contracts that allows for the payment of a specified sum should one of the parties be in breach of contract.

Reformation

A remedy whereby a court orders a change in a written document to reflect what it ought to have said in the first place.

Option

A right given for a consideration to purchase or lease a property upon specified terms within a specified time is known as a/an?

Option

A right given for a consideration to purchase or lease a property upon specified terms within a specified time; if the right is not exercised the option holder is not subject to liability for damages; if exercised, the grantor of option must perform.

Forbearance

A special agreement between the lender and the borrower to delay a foreclosure.

Notice

Prior to terminating an estate at will, what is the landlord or tenant required to provide to the other party?

Lawyer's fund for client protection

Setup to protect consumers from dishonest attorneys.

Statute of Frauds

State law which provides that certain contracts must be in writing in order to be enforceable at law.

Voidable

That which is capable of being adjudged void, but is not void unless action is taken to make it so.

Novation

The act of either: 1) replacing an obligation to perform with a new obligation; or 2) adding an obligation to perform; or 3) replacing a party to an agreement with a new party.

Novation

The act of either: 1) replacing an obligation to perform with a new obligation; or 2) adding an obligation to perform; or 3) replacing a party to an agreement with a new party is known as what...?

Novation

The act of either: 1) replacing an obligation to perform with a new obligation; or 2) adding an obligation to perform; or 3) replacing a party to an agreement with a new party is known as what?

leases

Which of the following is an example of a contract that will most likely affect agents or brokers?

Sellers attorney

Who typically prepares the contract in the sale of a home?

Right of first refusal

A contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before he owner is entitled to enter into the transaction with a third party.

Earnest money deposit

A down payment made by a purchaser of real estate as evidence of good faith is known as what?

caveat

A latin term that means "let him beware" is also known as what...?

Land lease

A lease agreement that permits the tenant to use a piece of land owned by the landlord in exchange for rent is known as what?

Net Lease

A lease that requires the tenant to pay, in addition to rent, some or all of the property expenses that normally would be paid by the property owner is known as what...?

Mutual agreement

Which of the following is an essential element of a valid contract?

Lease

A contract whereby, for a consideration, usually termed rent, one who is entitled to the possession of real property transfers such rights to another for life, for a term of years, or at will is known as?

Executory contract

A contract which has not yet been fully performed (fully executed).

Caveat

A Latin term that means "let him beware.". Caveat is usually interpreted as a sort of warning or cautionary expression.

Statute of frauds

A State law which provides that certain contracts must be in writing in order to be enforceable at law is known as?

Attorney review clause

A clause found in real estate contracts that may allow buyers to walk away from an agreed upon sale for any reason is known as what?

Attorney Review Clause

A clause found in real estate contracts that may allow buyers to walk away from an agreed upon sale for any reason.

Mortgage contingency clause

A clause in a contract that states a mortgage must be obtained in order for the contract to be binding.

Express contract

A contract in which all elements of a contract and terms are specifically stated is known as?

Express contract

A contract in which all elements of a contract are specifically stated (offer, acceptance, consideration), and the terms are stated, as compared to an "implied" contract in which the existence of the contract is assumed by the circumstances.

Uniform Commercial Code

A standard set of business laws that regulate financial contracts. The Uniform Commercial Code has been adopted by most states in the U.S. The code itself has nine separate articles. Each article deals with separate aspects of banking and loans. The UCC better enabled lenders to loan money secured by the borrower's personal property.

Statute of Limitations

A statute barring all right of action after a certain period of time from the time when a cause of action first arises.

Counteroffer

A type of offer made in response to another offer, which was seen as unacceptable is known as what?

Counteroffer

A type of offer made in response to another offer, which was seen as unacceptable. A counteroffer revises the initial offer, making it more appealing for the person making the new offer.

Power of Attorney

A written instrument duly signed and executed by a person which authorizes an agent to act on his/her behalf to the extent indicated in the instrument is known as what?

Power of Attorney

A written instrument duly signed and executed by a person which authorizes an agent to act on his/her behalf to the extent indicated in the instrument.

Covenant

Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property is known as what?

Rider

Also known as an addendum, in general, is a writing annexed to an agreement.

Implied contract

An agreement created by actions of the parties involved, but is not written or spoken is known as?

Executed contract

An agreement that has been fully performed.

Specific performance

An order of a court which requires a party to perform a specific act, usually what is stated in a contract, is known as what?

Specific performance

An order of a court which requires a party to perform a specific act, usually what is stated in a contract.

Constructive Eviction

Any disturbance of the tenant's possession of the leased premises by the landlord whereby the premises is rendered unfit or unsuitable for the purpose for which they were leased is known as what?

Constructive eviction

Any disturbance of the tenant's possession of the leased premises by the landlord whereby the premises is rendered unfit or unsuitable for the purpose for which they were leased is known as what?

Consideration

Anything given to induce another to enter into a contract such as money or personal services is known as?

Consideration

Anything given to induce another to enter into a contract such as money or personal services.

Earnest money deposit

Down payment made by a purchaser of real estate as evidence of good faith.

Offer and Acceptance

Elements required for the formation of a legally binding contract. The expression of an offer to contract on certain terms by one person (the "offeror") to another person (the "offeree"), and an indication by the offeree of its acceptance of those terms.

The state limits the amount of rent increases each year

How do State statutes regulate rent controlled apartments?

Estate at Will

In this type of leasehold estate, either the tenant or landlord can cancel and withdraw at any time...?

Caveat Emptor

Let the buyer beware. The buyer must examine the goods or property and buy at the buyer's own risk.

must have Capacity of contract

Mark is looking to rent an apartment in his neighborhood. Which of the following standard lease provisions must Mark satisfy in order to rent an apartment?

Lessor

One who rents property to another under a lease is known as the...?

Lessor

One who rents property to another under a lease is known as?

Assignment

The method or manner by which a right or contract is transferred from one person to another is known as what?

Assignment

The method or manner by which a right or contract is transferred from one person to another.

Down payment

The portion of a home's purchase price that is paid in cash and is not part of the mortgage loan is known as what?

Down payment

The portion of a home's purchase price that is paid in cash and is not part of the mortgage loan. This amount varies based on the loan type, but is determined by taking the difference of the sale price and the actual mortgage loan amount. Mortgage insurance is required when a down payment less than 20 percent is made.

Rescission

The right of an individual involved in a contract to return to a state identical to that before they entered into the agreement, due to courts not recognizing the contract as legally binding is known as what?

Recission

The right of an individual involved in a contract to return to a state identical to that before they entered into the agreement, due to courts not recognizing the contract as legally binding is known as?

Rescission

The right of an individual involved in a contract to return to a state identical to that before they entered into the agreement, due to courts not recognizing the contract as legally binding. In many cases, rescission may be an option if there is a material error in the contract, among other reasons.

Quiet enjoyment

The right of an owner or a person legally in possession to the use of property without interference of possession is known as?

Constructive eviction

The warranty of habitability, offered in a standard lease, may be violated by this type of eviction..?

"As-is"

This is a term that denotes that the seller is selling, and the buyer is buying a property in whatever condition it presently exists?

Periodic estate

This type of leasehold estate automatically renews?

void

To have no force or effect is known as what...?

Void

To have no force or effect is known as what?

Void

To have no force or effect; that which is unenforceable.

Keep the deposit in a separate bank account

What is the landlord required to do with a security deposit if the building is greater than 6 units?

The tenant must have a minimum amount of money in the bank

Which of the following is NOT a standard requirement found in a lease agreement?

Must be a US citizen

Which of the following is NOT an essential element of a valid contract?

Inventory Agreements

Which of the following is NOT an example of a contract that may affect agents or brokers?

Letter of intent

Which of the following is NOT an example of a valid contract?

All signatures must be notarized

Which of the following is NOT considered an essential element of a valid contract?

Must be in writing

Which of the following is an essential element of a valid contract?