RE Chapter 5

An agreement to do or not to do a certain thing

A contract in which a promise is given by one party to persuade the other party to do some action

Under a Unilateral Contract, the party not making the promise is ________, but if he does, the first party must ______

Examples of Unilateral Contracts (2)

A contract in which the promise of one party is given in exchange for the promise of the other party, and both parties are bound to perform

Aka "a promise for an act"

Aka "a promise for a promise"

Examples of Bilateral Contracts (2)

A contract in which something remains to be done by one or both parties

A contract in which both parties have completely performed their duties

A contract expressed in words, either oral or written

A contract which is valid and enforceable at first glance, but because of some defect, one or more of the parties may reject/void it

A voidable contract is valid (and remains binding on the parties) until ________

A document that is not actually a contract, because it lacks legal effect, aka it is missing one or more of the 4 essential "contract elements"

A contract that is valid and enforceable, and thus has all four of the essential elements required by law

The date a contract is formed, considered to be so when the final acceptance is communicated to the offeror

Four Elements of Contracts

A minor may not enter into a contract to hold title to real property unless ____ (3)

A real estate contract entered into by a minor is _____, whereas most other contracts signed by a minor are _____

Everyone is capable of contracting, including _____, except for (3):

Steps of "Mutual Consent" in real estate contracts (3)

A contract may also be called a _______

Ways in which Mutual Consent can be prevented (3)

A contract involving fraud is usually _____. In order to claim fraud, the buyer or seller must have _______

A contract entered into as the result of a mistake is ______ or ______

A contract entered into under duress is _____ by the injured party

A contract must be legal in ______ and ______

A contract entered into for an illegal purpose is ______

Anything of value, required in every executory contract, does not have be money

In a bilateral contract, the "consideration" is usually ________

The words "adequate, valuable, good or sufficient" in a contract refer to ______

Valuable Consideration in a contract consists of (3)

This is NOT an essential element to form a contract

Determines which contracts must be in writing to be enforceable

Contracts that must be in writing to be enforceable (5)

If a broker fails to keep an oral promise, a seller may _____

Examples of ORAL real estate contracts that are enforceable (3)

Contracts are assignable unless the call for some ________, or expressly or implicitly negate _____ (for example, a ____)

The agreement of the parties in a contract to substitute an entirely new contract in place of the existing one

Example of novation

An offer of performance as part of a contract

A unilateral act and its legal consequences, occurs in a contract when one party agrees to give up a right voluntarily

The revocation or repealing of a contract by mutual consent by parties to the contract, or for cause by either party to the contract

When a buyer backs out of a contract to buy a home and the seller exercises his right of rescission, the seller must _______ to the buyer. The seller can also ___ the buyer

Additional document(s) attached to and made part of a contract

A change to an existing contract by mutual agreement of the parties

When there is a conflict between portions of a contract which are handwritten info and preprinted clauses in a contract, the __________ take(s) precedence

2 remedies for a breach of contract

Remedy for a breach of contract that is used only when dollar damages will not provide an adequate remedy for the buyer (used often in RE, because property is considered "unique")

When a buyer sues for specific performance, the court will order the seller to ______ IF the buyer can prove that the contracted price _____

A ____ may not sue a buyer or seller for specific performance, but rather must sue for _____

A clause in a contract fixing the amount of damages, should one of the parties default

The standard residential deposit receipt (contract) contains a liquidated damages clause, which says "in the event of default, by buyer, seller shall retain as liquidated damages, ____% of the purchase price, or the amount of the deposit, whichever is ____"

When a buyer defaults, the liquidated damages are usually _________

The contract used to write an offer; the contract selling real property

An employment contract between a principal and an agent, that is employing the agent to do certain things for the principal

In good faith, without fraud or deceit, genuine. Having all the elements required by law in the case of contracts

A bona fide listing to sell real property must contain ____ (5)

In a listing contract, the "terms of sale" should include _______

A listing belongs to _____, not ______

A listing is a ____ party contract, between _____

If a broker for a real estate office dies, the listings in the office _______

Types of listings (3)

A contract given by an owner authorizing a broker to act as his agent, but the broker will only be entitled to commission if he is the "procuring cause" of the transaction

Responsible for the consummation of a transaction

A contract in which a seller agrees to pay a commission to the listing agent if his property sells through the listing agent or any other agent, but the seller retains the right to sell directly to a buyer and pay no commission

A seller who gives an exclusive agency to one broker, and an open listing to a second broker, would be liable for _______ if the second broker sold the property

A contract in which a seller agrees to sell through the listing broker only. If his property is sold by anyone during the term of the listing, the listing broker has the right to the commission

In an open listing, the broker must be _____ in order to be entitled to a commission

In an Exclusive Agency listing, the seller retains the right to ______ and pay no commission

A listing where the agent's commission consists of any money that is left over after the seller receives a fixed amount

In what type of listing would an agent who was the procuring cause of a sale possibly not earn ANY commission?

A net listing requires an agent to disclose ___ and ______ to the seller when presenting an offer

A contract in which a buyer agrees to buy through the buyer's agent only, aka a Buyer Listing

A listing does not need a _____ as long as it adequately describes the property. It can be the street address as long as the seller ______

When a broker takes an exclusive listing, she is obligated to _____ the property and use ____ to procure a buyer

A typical listing authorizes the broker to accept _______ as the seller's agent

If a broker is NOT authorized to receive a buyer's deposit, but does so anyway, he is treated as ______ for that one act

A clause in a listing which allows a broker to receive a commission if a buyer he introduced to the property buys that property after the listing has expired

A clause in a listing contract designed to protect an agent from liability for false information given by the seller about the condition of the property

Commission may be in the form of ____ (4)

Any exclusive listing must have a definite _____________

A termination date/length of contract is determined by ______

Type of listing that does not require a termination date

An owner can ______ an exclusive listing at any time, but may be liable for _______ under the agreement

Contract used to write an offer, aka the contract used to sell real property

An offer with contingencies is _____

If a contingency fails, the buyer ______

4 ways an offer can be terminated

Termination of an offer in which the buyer revokes it prior to communication of the seller's acceptance, for any reason

When a buyer withdraws an offer, he must receive

A counter-offer automatically ____ the original offer

Clause found in the RPA that refers to the entire contract and encourages that deadlines be met

If a real estate licensee advises buyers about how to take title when preparing an RPA, she may be giving ___ advice, ___ advice, or possibly providing a basis for a claim of _____

If a buyer properly notifies the seller of a problem resulting from a home inspection during escrow, and the seller quickly fixes the problem, the buyer is _____

If a buyer's inspector damages a seller's property, _____ must pay for repairs

A clause in a contract in which the parties agree to arbitrate a dispute rather than go to court

If the parties in an RPA did not initial the arbitration clause and the buyer wishes to rescind the contract and get his deposit back, his remedy is to ______

A listing agent who receives multiple offers on one property must present them _________

The deposit receipt gives the broker the authority to hold a buyer's deposit for ____, or until _____

If a seller requests a buyer's deposit after an offer has been accepted, the broker must obtain _______ before releasing the check to the seller

A contract to keep an offer to lease or sell real property open for a set period, during which time the seller agrees NOT to revoke his offer to sell

An Option must be supported by actual _____, and restricts the optionor because it ______ during the option period. An option does not necessarily require a separate _____

Under an option, the optionee ____

Under an option, the optionee does not hold a _______ in title to the property, and does not have any right to ______

An agent who has an option to buy a property which she also has listed for sale has ______

In order for an AGENT to exercise the option to buy (in an option contract), he must reveal to the seller, in writing, any ______ and the amount of _______, and must also get the ______

A broker's desk cost, or upkeep expenses, is calculated by dividing ____ by _____

Calculated by subtracting commissions paid to salespersons from the gross income of the brokerage

Real estate commissions are _____, and must be disclosed as such in 1-4 unit residential listing agreements. Setting fixed commission rates violates _____