Chapter 9 - Real Estate Contracts

Bilateral Contract

A contract in which each party promises to do something.

"Time is if the essence"

A condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time.

Sales Contract

A contract by which a buyer and seller agree to the terms of a sale.

Listing Contract

A contract in which a property owner employs a real estate broker to market the property described in the contract.

Executory Contract

A contract in which something remains to be done by one or both of the parties.

Valid Contract

A contract that complies with all of the essential elements of a contact, and is enforceable and binding on all parties.

Executed Contract

A contract that has been fully performed

Express Contract

A contract that has been put into words, either spoken or written.

Earnest Money Deposit

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

Statue of Limitations

A law establishing the time period within which certain lawsuits may be brought.

Counter Offer

A response to an offer to enter into a contract, changing some of the terms of the terms of the original offer. A counter offer is a rejection of the offer (not a form of acceptance), and does not create a binding contract unless accepted by the original offeror.

Breach of Contract

A violation of the terms or conditions of a contract without a legal excuse.

Contract

A voluntary, legally enforceable promise between two legally competent parties, to perform some legal act in exchange for legal consideration.

Real estate agents use which of the following contracts...? Express Contracts Listing Contracts Buyer Representation Agreements All of the above

All of the above

Implied Contract

An agreement that has not been put into words, but is implied by the actions of the parties.

Equitable Title

An interest in real estate such that a court will take notice and protect the owner's rights.

Consideration

Anything given or promised by a party to induce another to enter into a contract, ex: personal services or even love and affection. It may be a benefit conferred upon one party or a detriment suffered by the other.

Those to whom property or interests therein shall have been transferred are known as...? Trustors Trustees Assignees Assignors

Assignees

A transfer of benefits and obligations within a contract to a 3rd party who is not originally a party to the contract is known as a/an...? Assignment Novation Conversion Offer and acceptance

Assignment

If one of the parties to a contract wants to withdraw without terminating the contract, which of the following can be used...? Novation Acknowledgement Assignment Conversion

Assignment

One who assigns or transfers property is known as a/an...? Assignor Assignee Trustor Trustee

Assignors

A contract in which each party promises to do something is referred to as a...? Unilateral Contract Bilateral Contract Executed Contract Voided Contract

Bilateral Contract

Anything given or promised by a party to induce another to enter into a contract is known as...? Conversion Consideration Novation Assignment

Consideration

The unlawful appropriation of another's property or earnest money deposit is known as...? Commingling Conversion Steering Redlining

Conversion

Liquidated Damages

Damages benefiting the non-defaulting party as a result of a default of a contract.

When a contract is fully performed, the contract is considered...? Discharged Assigned Acknowledged Converted

Discharged

A down payment made by a purchaser of real estate as evidence of good faith is known as...? Earnest money deposit Escrow money Interest payment Binding deposit

Earnest money deposit

Until a purchase contract is closed upon, it is considered a/an...? Executory contract Executed contract Void contract Implied contract

Executory contract

A contract that has been put into words, either spoken or written is known as a/an...? Express Contract Implied Contract Note Deed

Express Contrsct

Assignor

One who assigns or transfers property.

Voidable

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

Novation

The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties.

Conversion

The unlawful appropriation of another's property, as in the conversion of trust funds.

Assignee

Those to whom property or interests therein shall have been transferred.

This is a condition of a contract expressing the essential nature of performance of the contract by a party in a specified period of time...? Assignment Acceleration Time is of the Essence Novation

Time is of the Essence

Void

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

Commingling

To mingle or mix, for example, a client's funds in the broker's personal or general account.

This contract is formed only if another party performs the requested act...? Bilateral Contract Executed Contract Unilateral Contract Voided Contract

Unilateral Contract

A contract that has no force or effect is referred to as a/an...? Void Contract Valid Contract Executory Contract Executed Contract

Void Contract

Unilateral Contract

When one party promises to do something if the other party performs a certain act, but the other party does not promise to perform it; the contract is formed only if the other party does perform the requested act.

Assignment

A transfer of benefits and obligations within a contract to a 3rd party who is not originally a party to the contract.

To mingle or mix, for example, a client's funds in the broker's personal or general account is known as...? Commingling Conversion Steering Redlining

Commingling

An interest in real estate such that a court will take notice and protect the owner's rights is known as...? Legal Title Secured Title Protected Title Equitable Title

Equitable Title

Which of the following real estate contracts must be in writing...? Sales contract Lease contract for greater than 1 year Purchase contract for a multi-family property All of the above

All of the above

In addition to the essential elements of a valid contract, real estate contracts must include which of the following...? An accurate legal description of the property Proof of funds The signature of the real estate brokers involved in the transaction All of the above

An accurate legal description of the property

Specific Performance

An action to compel performance of an agreement, ex: sale of land as an alternative to damages or rescission.

A listing contract is an example of a/an...? Bilateral contract Unilateral contract Void contract Implied contract

Bilateral contract

When you give your keys to a valet, you assume that the valet will park your car in exchange for a fee. This is because a/an ................... contract was created between you and the valet? Express Voidable Implied Exclusive

Implied

An agreement that has not been put into words, but is implied by the actions of the parties is known as a/an...? Implied Contract Express Contract Deed Note

Implied Contract

A meeting of the minds between two parties is also known as...? Conversion Novation Consideration Offer and acceptance

Offer and acceptance

A listing contract exists between a seller and the...? Real estate broker Real estate salesperson Customer Any of the above

Real estate broker