Real Estate Contracts and Agency Flashcards

Questions and Answers

What are the types of contracts?

Express vs Implied (correct)

Verbal vs Written

Unilateral vs Bilateral (correct)

None of the above

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.

consideration Signup and view all the answers

What is the difference between executed and executory contracts?

Executed contracts have been fulfilled, whereas executory contracts have terms set to be fulfilled later. Signup and view all the answers

What is a valid contract?

A valid contract has all the required elements and is enforceable in a court of law. Signup and view all the answers

What is a voidable contract?

A voidable contract appears valid but has flaws allowing one or both parties to void it. Signup and view all the answers

What is a breach of contract?

An act of breaking the terms set out in a contract. Signup and view all the answers

What does rescission mean in contracts?

Rescission refers to unmaking a contract and returning parties to their original state. Signup and view all the answers

What are liquidated damages?

Damages designated during contract formation to compensate for a specific breach. Signup and view all the answers

What does 'time is of the essence' mean in a contract?

It means prompt performance is necessary, and failing to act on time constitutes a breach. Signup and view all the answers

What is a right of first refusal?

A contractual right allowing the holder to enter a business transaction before the owner can offer it to third parties. Signup and view all the answers

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.

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.