RE Principles Ch 4
Terms
undefined, object
copy deck
- What exactly is a contract?
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(notes)
A contract is a legally enforceable agreement between two or more people to do or not to do something. - What are the FIVE necessitys for a legal contract to exist?
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1) Offer
2) Acceptance of the offer of the terms
3) Consideration
4) Capisity
5) Legality -
Bob agrees to mow Mr. Jones lawn for 10.00. Mr. Jones will pay him after he mows the lawn.
What type of Contract Exists? - UNILATERAL
- In the lawn mowing contract with Bob and Mr. Jones, Bob never mows the lawn.Does Mr. Jones owe him for the contract? Why?
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NO
Because the PERFORMANCE was never completed therefore he is not required to pay the cost. - Real Estate Agreements are usually what type of contracts?
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BI-LATERAL
PROMISE FOR A PROMISE
SELL YOUR HOME----PAY ME COMMISSION -
I have a contract that is in writing, all the terms are clear, and there are dates of expiration..
What type of contract do I have? - EXPRESS CONTRACT
- Mary brings her Realtor friend to an open house, though they have no agreement in writing, she introduces her friend to the owner as her "agent" why could a contract be assumed in the future?
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BECAUSE OF IMPLIED AGENCY OR IMPLIED CONTRACT..
HER ACTIONS LED BOTH PARTIES TO ASSUME AN AGENCY EXISTED. - What are the general rules for a contract to be in writing?
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1) Real Estate
2) Contracts over 750.00
3) Contract that will exist for over one year. ( lease, mortgage etc.) -
98% of contracts are what type of contract?
Formal or Informal - Informal
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My purchase of my home is finished. All funds are transfered, the title is recored. All releases are signed.
1) Can I cancel this contract? Why? -
NO
It is an EXECUTED Contract - I am buying a car. I have my offer in but am waiting for my loan approval. At this point my contract is still in what phase_____.
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EXECUTORY:
Performance is still necessary. - A VALID CONTRACT is what?
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One that possesses the FIVE elements.
It is a enforceable contract. -
I have a contract to sell stolen goods.Is this a....
Void
Valid
Voidable
Unforceable -
VOID
This act is illegal and thus no contract that can be enforced can exist. -
Mrs. Jones has a mental illness and entered into contract from her nephew persuading her to sell. This is a..
Valid
Void
Voidable
Un-Enforceable -
VOIDABLE
Two reasons:
Mental Capacity
Duress - What three items must exist in an offer?
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1) A SERIOUS offer
2) Definiteness: Terms
3) Communication to seller. -
A Realtor gives an offer to another Realtor on a listing. The Listing Agent says " We Accept"
Is this legal? Why? -
No.
All offers must be presented to the seller/owner and accepted by the seller/owner. - My doctor says that my broken leg should heal in about 3 months. It has been four months, and still has not healed. Is he in breech of contract? Why?
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No
Matters of opinion cannot be held as contract. -
I have listed a home for 750K. There are ads, listings in the MLS.
Are my clients obligated to sell at 750K? Why? -
NO
An advertisement is not a GUARANTEE to sell. It is an invitation to sell. -
Minor Child "A" enters a contract to sell his mini-bike. When the buyer comes, he says "no I don't want to sell"
Is he contracted? Why? -
NO
You can't contract with a minor. -
If I have written evidence and the other party has verbal evidence. Which takes precedence?
Which Rule Applies -
WRITTEN
PAROLE EVIDENCE RULE -
Jim made an offer on a home with a 3 day acceptance, Jack, the owner responds with a Counter Offer.
Who is the Offerer Now? -
Jack.
He has now produced a new offer/ - A Contract that is approved is said to be what?
- RATIFIED
- An _____________ is an unqualified agreement to the terms in a offer.
- ACCEPTANCE
- If I am unable to accept an offer I can elect someone to be my _____________ to accept the offer on my behalf.
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POWER OF ATTORNEY
ATTORNEY IN FACT - I am the seller and I change my mind. I can _________ the contract before we have an acceptance.
- REVOKE
- If a party does not want to accpet an offer they can ________ the offer. This is called ____________.
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REJECT
REJECTION - Bob gave an offer on a property with a three day acceptance period. On the fifth day, the seller replies with acceptance. Is Bob bound to the offer? Why?
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No
Lapse of Time occurred - I mailed an acceptance on June 17th. When is is valid?
- The DAY it was mailed, June 17th.
- I mailed a revocation of an offer on June 15th. When is it valid?
- It is not valid until it is RECEIVED. This is the importance of Certified Mail or Proof of Delivery.
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ALL Contracts must have some form of:
Explain: -
CONSIDERATION OF LEGAL VALUE
A Detriment to the promisee and a beneficial to the promisor. - In Real Estate, what is something that can be considered an UNILATERAL contract?
- OPTION