Contracts and Contract Law - 10

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.

Accepting liquidated damages

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

Accepting partial performance

Covenant not to compete

An agreement where one party promises not to engage in conduct that would increase competition for the other party

Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent?

Consideration

When the offer is accepted, you receive _____ to the property. You have the right to full ownership when the sales closes

Equitable title

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

Unenforceable

A sweepstakes entry is a ____________ because only the sweepstakes administrator is obligated to perform any action.

Unilateral contract

In which of the following types of contracts is when the terms have been completed?

Executed contract

Which of the following is true of an express contract?

It's stated specifically

Which of these statements about Arizona real estate contracts is true?

Member licensees may use forms provided by the Arizona Association of REALTORS®.

In a purchase offer, is earnest money required in order to have a binding contract?

No, because the buyers consideration is the promise to buy

What is a breach of contract?

One party fails to meet the obligations of the contract

Which of these scenarios is a covenant not to compete likely to address?

When a commercial buyer or tenant wants to prevent a similar business from locating in the same small geographical area over. E.G Teeny Tots Clothing is leasing a retail condominium unit.

Sondra thinks the new business contract she signed with her business partner is valid. Both parties are legally competent, the contract has a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?

Whether consent was voluntary

Tyne entered a contract to buy Fred's home. Per the terms of the contract, Tyne agreed to pay $20,000 in earnest money by this coming Wednesday and have the property inspected within seven days. She submitted the earnest money deposit on time and had the property inspected within five days. What action does this scenario exemplify?

Performance of this part of the contract

Several counter-offers have passed between Josh and the Kobza family in their attempt to buy Josh's house. All records have been transmitted and signed electronically. The Kobzas electronically signed Josh's latest counter-offer. Their response was due on June 6; they signed on June 5. Josh saw their response in his email on June 7. Josh terminated the contract, saying he didn't receive their response in a timely manner. Which statement about Arizona's electronic records laws is correct?

Properly sent electronic records are considered received even if the recipient is unaware of the document's receipt.

Who or what most likely establishes a covenant not to compete?

Purchase or lease contract

Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren't going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______.

Rescinding the contract unilaterally

Marta, a new licensee, woke up in the middle of the night terrified that she failed to write a loan contingency into her buyers' recently executed purchase contract. What should she do?

Roll over and go back to sleep when she remembers that the AAR purchase contract includes an automatic loan contingency.

Velma accepted Rigli's offer on her acreage. The offer's contingent on Rigli's sale of his current home. She accepted the offer on the condition that she can continue to actively market her property. What's likely to happen if Velma gets a non-contingent offer on her property?

She'll give Rigli a set amount of time to remove the contingency (usually 24 hours).

Which of these situations represents a unilateral contract?

Sherry promises to give Brent a ride home from work, and then doesn't show up.

An executory contract is one that's been ______.

Started

Which of the following laws requires that contracts—including contracts made for the sale of real estate or for leases of more than one year—be in writing?

Statute of frauds

Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?

The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms.

Joseph needed help with his daily activities, so his niece, Brenda, did his cooking, shopping, and cleaning. Joseph told her he would leave some money to her in his will. Brenda thanked him. But when her Uncle Joseph died, he only left Brenda his antique tea set. Why didn't Brenda get any money?

The contract was verbal

What is right of first refusal?

The right of a person to have the first opportunity to purchase or lease a property

Define enforceable

The seller has accepted the buyer's offer in writing and the buyer has been notified of the acceptance. It will stand up in court

What is novation?

The substitution of one party for another, with the original part not being obligated to the contract.

What is assignment?

The substitution of one party for another, with the original party still being obligated under the terms of the contract.

What is performance?

The two parties have met the terms under the contract

What is a bilateral contract?

A contract that includes the exchange of a promise for a promise. Sales contract is an example.

Define unenforceable

A contract that is in theory legal/valid, but is not defensible in court. A contract that is not written

In which of the following types of contracts does one or more of the contract's terms still need to be completed?

Executory contract

Sam is taking out a home loan, which states the offered price and includes other important information, like the payments, the loan term, and Sam's signature. What type of contract is this?

Express

Which of the following Arizona residential sales contract provisions is used to identify which items are to remain with the property?

Fixtures and personal property

What does a POA do?

Gives one party the authority to act on behalf of another party

Swede is the vendor in a contract for deed arrangement. The vendee is not making his monthly payments. What is the process Swede can use to reclaim equitable title of the property?

Termination

What is put at risk if a buyer misses a contingency deadline?

The buyer's earnest money

A contract used for an illegal purpose is ______.

Void

Lack of capacity has made the contract non-binding, so the contract is _____.

Voidable