Real Estate Chapter 6 Flashcards

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Questions and Answers

What is an Express Contract?

A contract that is formed by actions.

A contract that is written or verbally stated. (correct)

A contract that is binding on one party only.

A contract that is invalid.

What defines an Implied Contract?

A contract formed by the actions of parties. (correct)

A contract expressed through writing.

A contract that is void.

A unilateral agreement.

A Bilateral Contract involves:

A promise for a performance.

A contract that is unenforceable.

A contract with no intent.

A promise exchanged for a promise. (correct)

What is a Unilateral Contract?

A promise for a performance. Signup and view all the answers

What is forbearance?

An agreement not to do something. Signup and view all the answers

A contract is ___ if it meets all requirements of law.

valid Signup and view all the answers

What does voidable mean?

A contract binding on only one party. Signup and view all the answers

What does void mean?

Not a contract at all. Signup and view all the answers

What is an unenforceable contract?

A contract that was once valid but is no longer enforceable. Signup and view all the answers

What are Competent Parties?

People of legal contracting age who are not intoxicated or ruled mentally incompetent. Signup and view all the answers

What constitutes Mutual Agreement?

Both parties agree to the contract terms. Signup and view all the answers

What is Fraud in contract law?

Intentionally deceiving another party. Signup and view all the answers

What is Innocent Misrepresentation?

Accidentally deceiving another party. Signup and view all the answers

What denotes a Mistake in contract negotiations?

Ambiguity in negotiations or material fact mistakes. Signup and view all the answers

What is Contractual Intent?

The intent to create a legally binding agreement. Signup and view all the answers

What is Duress in the context of contracts?

An agreement made under threat or coercion. Signup and view all the answers

What is a Lawful Objective in contract law?

A contract that serves a legal purpose. Signup and view all the answers

What does Consideration refer to in contracts?

Something of value exchanged between parties. Signup and view all the answers

What is Valuable Consideration?

Money or anything worth money. Signup and view all the answers

What is Good Consideration?

A gift based on affection. Signup and view all the answers

Why must contracts related to the sale of land be in writing?

To satisfy the Statute of Frauds. Signup and view all the answers

What is an Assignment in contract law?

Transferring rights or obligations to another party. Signup and view all the answers

What is Novation?

A new contract replaces an existing one. Signup and view all the answers

What is Mutual Rescission?

Both parties cancel the contract before it is over. Signup and view all the answers

What is an Unlawful Objective in contract law?

A contract that deals with illegal activities. Signup and view all the answers

Study Notes

Types of Contracts

Express Contract: Formed through clearly stated intentions either verbally or in writing, such as leases or real estate sales.
Implied Contract: Established through the actions of the parties involved, for example, ordering food at a restaurant implies a payment obligation.
Bilateral Contract: Involves mutual promises, where one party does something in exchange for the other party doing something else, common in real estate transactions.
Unilateral Contract: Involves a promise in exchange for a specific performance, such as a listing agreement where the seller pays a commission if a buyer is found.

Contract Validity

Valid Contract: Meets all legal requirements; binding and enforceable in court.
Voidable Contract: Binding on one party but can be canceled by the other party.
Void Contract: Completely unenforceable and not recognized by law.
Unenforceable Contract: Once valid but no longer enforceable for specific reasons.

Competent Parties

Legal age requirement is typically 18 (19 in Alabama).
Parties must not be intoxicated or declared mentally incompetent by a court.
A power of attorney allows one person to act on another's behalf.
Corporations are competent if documents are properly executed.

Mutual Agreement Elements

Both parties must accept terms, evidenced by offer and acceptance.
Changes to the original offer create a counteroffer.
No agreement if fraud, innocent misrepresentation, or duress is present.

Misrepresentation and Fraud

Fraud: Deliberate deceit or failure to disclose important info allows the wronged party to rescind the contract.
Innocent Misrepresentation: Unintentional deception permitting rescission, but not mandatory.

Other Contract Considerations

Mistake: Can involve ambiguity or a material fact change affecting negotiations.
Contractual Intent: Essential for enforcing agreements; jokes lack enforcement intent.
Duress: Coercive threats prevent a fair meeting of the minds.

Legal Objectives

Contracts must be for legal purposes, as courts won’t enforce illegal agreements.

Consideration Types

Consideration: Value exchanged in contracts, such as money for property title.
Valuable Consideration: Includes money or valuable services.
Good Consideration: Involves gifts made out of affection.

Writing Requirements

In Writing: Contracts for land must be written according to the Statute of Frauds; similar requirements exist for personal property over $500.

Contract Assignment and Novation

Assignment: Rights or obligations can be transferred, but the original party remains liable.
Novation: Involves replacing an existing contract or adding/removing parties.

Contract Cancellation

Mutual Rescission: Both parties voluntarily agree to cancel an ongoing contract.

Unlawful Objective

Contracts become void if their purpose becomes illegal.

Impact of Death

Certain contracts may be affected by the death of a party, depending on the contract nature and terms.

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Description

Test your knowledge on key concepts from Real Estate Chapter 6 with these flashcards. Learn about different types of contracts such as express, implied, and bilateral contracts through clear definitions and examples. Perfect for students preparing for exams in real estate education.