Questions and Answers
What are the types of contracts?
What is the difference between express and implied contracts?
Express contracts are clearly stated, while implied contracts are automatic and cover consumer goods over a certain value.
What distinguishes unilateral from bilateral contracts?
Unilateral contracts involve only one party, while bilateral contracts involve both parties.
The required elements of a valid contract include: offer, acceptance, _____, mutuality of obligation, competency and capacity, and written instruments.
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What is the difference between executed and executory contracts?
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What is a valid contract?
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What is a voidable contract?
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What is a breach of contract?
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What does rescission mean in contracts?
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What are liquidated damages?
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What does 'time is of the essence' mean in a contract?
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What is a right of first refusal?
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Study Notes
Types of Contracts
- Contracts can be classified as express (clearly stated verbally or in writing) or implied (automatically covers most consumer goods with base-level consumer protection).
- Additional classification includes unilateral (involves only one party making a promise) and bilateral (involves mutual promises from both parties).
Required Elements of a Valid Contract
- Essential components include an offer, acceptance, consideration, mutuality of obligation, competency and capacity, and written instruments.
Contract Performance
- Distinction between executed contracts (all terms fulfilled) and executory contracts (terms to be fulfilled later).
- Valid contracts have required elements and are enforceable; void contracts lack effect and enforceability.
- Voidable contracts are initially valid but have potential flaws that can make them unenforceable.
- Unenforceable contracts cannot be upheld in court due to ambiguity.
- Breaches entail violating contract terms; rescission aims to return parties to pre-contract status, and termination ends contracts prematurely.
- Types of damages include liquidated (designated for specific breaches), punitive (beyond compensation for punishment), and compensatory (for direct losses).
Statute of Frauds and Time Considerations
- The Statute of Frauds mandates that specific oral contracts be written and signed.
- “Time is of the essence” stipulates that timely performance is critical; delays can result in breach.
Main Parts of Sale Contract
- Key aspects include the offer and counteroffer process, earnest money agreements, equitable title, contingencies, and options for dispute resolution.
- An option contract grants exclusive purchasing rights, while an installment sales contract allows staggered payments.
Agency Relationships
- An agency relationship is fiduciary among brokers and principals, categorized into buyer agency, seller agency, and intermediary agency.
Creation and Termination of Agency
- Creation methods include express, implied, and ostensible agency, or agency by ratification.
- Termination can occur through expiration, mutual rescission, revocation, renunciation, abandonment, or breach of fiduciary duty.
Licensee Obligations
- Licensees must act in their client's best interests, ensuring fairness and honesty throughout the transaction.
Right of First Refusal
- A contractual right allowing the holder to enter a transaction with the property owner before the owner can engage with third parties.
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Description
This quiz covers essential terms related to real estate contracts and agency, including types of contracts, express versus implied contracts, and unilateral versus bilateral agreements. Perfect for students or professionals looking to strengthen their understanding of real estate law concepts.