From Principles Workbook Unit 4 Flashcards Preview

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Flashcards in From Principles Workbook Unit 4 Deck (81)
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1

a contract is a legally binding agreement

between two or more competent parties to do or not do certain things for consideration

2

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

express contract

3

implied contract

created by the actions of the parties

4

in order to comply with statute of frauds (and enforaceable by courts), all contracts for the sale or transfer of real estate must be

express written contracts with the exception of a lease for 12 months or less

5

a breach of contract occurs when

a party fails, without legal excuse, to perform any promise contained in the agreement.

6

after a breach, the nonbreaching party has four options:

- acceptance of partial performance
- specific performance
- liquidated damages
- actual money damages

7

bilateral contract

promise exchanged for a promise
both parties are boudn to perform
I.E. a purchase agreement

8

unilateral contract

promise exchagned for performance
only one party is bound
I.E. an option

9

statute of limiations for breach of oral contract

two yeras

10

statute of limiations for breach of written contract

four years

11

statute of limiations for fraud

three years from the date of discovery

12

stages of a contract

- offer
- contract
- termination

13

the offer stage is

a negotiation period, no contract exists yet
- offers may be countered and new offers made until there is "meeting of the minds"

14

in the offer stage, earnest money is

not usually deposited because there is not a contract yet

15

strike-through changes on an offer must be

initialed (and dated for clarity) by all parties to be enforceable

16

a contract is formed when

a meeting of the minds and communication of acceptance by the parties

17

termination of an offer can occur through

- counteroffer
- revocation or withdrawl by offeror
- rejection by offeree
- lapse of an unreasonable time
- event that destroys the property
- death of either party

18

in order for the contract terms ot be changed,

an amendment must be negotiated and signed by all parties

19

termination of a contract examples

lease - on expiration date or notice as determined by the lease contract
option - on expirationd ate unless option is excercised, then the option will need a purchase contract to close
purchase contranct - either by a party excercising a contingency and termination or at closign with conveyance of the deed
breach - nonbreaching party will have remedies against he breaching party per the contract

20

ESSENTIALS OF A VALID CONTRACT

CO-CA-CO-LA
COnsent/Mutual Agreement
CApacity/Legally
COnsidersation
LAwful objective

21

when does a contract become binding?

upon communication of acceptance

22

a counteroffer is a

rejection of the original offer and the creation of a new one

23

in a counteroffer, the original offerre becomes

the offeror

24

caveat emptor means

"let the buyer beware"
not common due to disclosure requirements

25

seller must disclose

all material defects and facts even if selling as is

26

actual fraud consists of

- lyling
- suppressing known facts
- making a promise with no intention of performing it

27

to be a competent party, you must be

- 18 years old or an emancipated minor
- must be sane

28

executory

not yet fully performed
starts upon communication of acceptance of the offer

29

executed

duties fully performed
purchase agreement is executed once the deed has been delivered and accepted

30

assignments transfer

contract rights, but not liability