Real Estate Contracts

Real Estate Contract Law vocabulary flashcards for exam preparation

Consideration

Something of legal value offered by one party and accepted by another, e.g., the buyer's promise to pay the full purchase price, and the seller's promise to transfer marketable title through delivery of a deed.

Legally competent parties

Those who have the legal and mental capacity to enter into a contract.

Statute of Frauds

Requires that certain types of contracts, such as for a property ownership transfer, be in writing to be legally enforceable.

Voidable contract

One that appears valid, but one or both parties have a legal right to disaffirm it.

Void contract

Isn't a contract at all because it lacks one or more of the requirements for a valid contract; it has no legal force or effect.

Bilateral contract

Both parties have obligations.

Unilateral contract

Only one party makes a promise.

Option contract

An offer to purchase a specific piece of real estate without the obligation to buy it. (Unilateral Contract)

Executed contract

One in which all parties to a contract have met all contract terms.

Executory contract

Until all of the promises in the contract have been completed.

Uniform Electronic Transactions Act (UETA)

An attempt to bring some degree of standardization to state laws regarding use of electronic documents and signatures.

Breach of contract

Occurs when one party fails to meet contract obligations.

Unilateral rescission

When a breach occurs, the innocent party may unilaterally terminate the contract.

Specific performance suit

Seeks to force a party to make good on the promises made in some way.

Contract discharge

The parties have met all contract terms and are discharged from their contractual obligations.

Contract termination

One of the parties ends the contract before it's fully performed.

Contract rescission (cancellation)

Results from an operation of law, such as breach of contract, destruction of the object of the contract, etc.

Assignment

To transfer contractual rights or duties to a new party.

Novation

Occurs when one contract is substituted for another.

Addendum

An addition to an existing document, such as an offer to purchase. It adds terms not addressed in the main body of the contract form.

Amendment

A change to an existing contract between parties. It changes one or more of the original contract terms.

Offeror

The party extending the offer.

Offeree

The party receiving the offer.

Binding acceptance

Happens when the signed contract is delivered back to the offeror.

Contingencies

Conditions that must be met before the agreement of sale is complete and enforceable.

Counter-offer

Cancels the original offer.

Back up contract

One that has been accepted contingent on the disposition of the primary contract.

Escalator offer

Is one where the buyer offers to top any existing offer by a certain amount, up to a specified cap.