Elements of a Valid Contract in Texas

In a real estate transaction, which three of the following are examples of consideration?

-The seller's promise to sell the property to the buyer -The earnest money the buyer puts down - The property itself

Which of these statements describes the essential element of offer and acceptance? There are two correct answers.

-Two parties enter into an agreement with full understanding of contract terms. -A real estate broker offers to represent a client in a sales transaction. They discuss the terms of the agreement and the client accepts.

According to the Uniform Electronic Transactions Act and the Uniform Real Property Electronic Recording Act of 2005, when are electronic transactions legally enforceable?

Both parties agree to conduct the transaction electronically.

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

Consent

Valuable consideration:

Valuable consideration may be an exchange of money for a promise, an exchange of an item of value for money, or an agreement between the parties to do or not to do something.

A contract for an illegal purpose is ______.

Void

What's consideration with regard to a contract?

Something of value is given in exchange for something of value.

T or F: "Voluntary agreement" is also known as "reality of consent."

True

T or F: If your client signs a contract while under duress, that contract is not valid.

True

T or F: One form of duress is a threat of significant economic harm.

True

Undue influence

Undue influence exists when an act of persuasion overcomes another individual's free will and judgment.

Offer definition

is a promise made by one party, requesting something in exchange for that promise.

Acceptance definition

is a promise to be bound by the exact terms made in the offer.

Other Hindrances to Consent

-A mistake -Misrepresentation -Fraud -Undue influence

What is true about Legal Competent parties?

-If a party doesn't have legal capacity and enters into a contract anyway, the contract is voidable by the party lacking the capacity. -A minor who enters into a contract to purchase real estate has contractual ability. -The minor who enters into a contract with an adult to purchase real estate may hold the adult to the contract, but the adult can't legally hold the minor to the contract.

Legally competent party

A legally competent party has the capacity (legal and mental) to enter into a contract.

What does legal purpose mean?

Contracts must be written for a lawful objective.

Duress

Duress includes the use or threat of force, such as blackmail or bodily harm.

T or F: "Voluntary Agreement" means the same thing as "under duress."

False

T or F: Contracts are valid as long as at least one party has agreed to it voluntarily.

False

Good consideration:

Good consideration is a gift. For instance, this might be a gift from one family member to another.

Five additional essential elements to a valid real estate contract:

-Legally competent parties -Offer and acceptance -Consent -Legal purpose -Consideration

The residents of Blair Avenue are a close-knit bunch. They're all young couples with small children, and they don't want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids or to anyone over the age of 50. The contract can't be enforced because it's missing ______.

Legal Purpose