Contracts and Closing - Post 302 Study Guide

Vocabulary flashcards derived from the Post 302 Contracts and Closing study guide covering contract enforceability, due diligence rules, settlement procedures, RESPA regulations, and North Carolina licensing requirements.

Valid Contract

A contract that satisfies all legal requirements for a contract and is enforceable by law, requiring mutual assent, consideration, legal contractual capacity, and lawful objective.

Statute of Frauds

A law requiring all contracts to convey real property to be in writing and signed by all parties to be enforceable in a court of law.

Void Contract

A contract that is unenforceable in a court of law, such as contracts executed with a person declared mentally incompetent by a court of law or oral contracts to sell real estate.

Voidable Contract

A contract where performance can be avoided by one of the parties based on a legal principle, such as contracts with a minor or a person under the influence of narcotics or alcohol.

Mailbox Rule

A method of communicating acceptance where an offer is considered accepted at the date and time of mailing once in control of the mail service and out of the offeree's control.

Uniform Electronic Transactions Act

An act allowing a valid, enforceable contract between buyer and seller to be created via email without either party talking to each other, provided offer, acceptance, and proper communication occur.

Earnest Money Deposit

A deposit held in the trust account of an escrow agent that represents liquidated damages to the seller if the buyer breaches after the Due Diligence Period.

Due Diligence Period

The time period during which a buyer can inspect any areas of the property or circumstances affecting the property for the buyer's satisfaction.

Due Diligence Request and Agreement

The form that a buyer uses to request repairs or improvements to the property during the Due Diligence Period.

Standard Form 12-T

The Offer to Purchase and Contract - Vacant Lot/Land form used when a buyer wants to purchase an undeveloped lot in a subdivision to build a house.

NCAR Form 340-T

Response to Buyer's Offer form used to reject an offer, suggest new terms, or set a review deadline without creating a counteroffer or binding contract.

Real Estate Settlement Procedures Act (RESPA)

A federal law applying to residential ($1\text{-}4$ unit) transactions with federally related mortgage loans that restricts escrow cushions and prohibits kickbacks or referral fees between settlement service providers.

Installment Land Contract

A contract where the seller retains legal title until the loan is paid in full by the buyer, which must be recorded by the seller within $5$ business days of execution.

Option to Purchase

A contract giving the optionee the exclusive right to purchase property during a stated option period, requiring an option fee and recording within $5$ business days per the North Carolina Connor Act.

Postlicensing Education Requirements

Three $30$ ext{-}hour postlicensing classes that a broker must complete within $18$ months of licensure to avoid an inactive license status.

Annual Continuing Education (CE) Requirements

A mandatory $4$ ext{-}hour GENUP or BICUP class plus a $4$ ext{-}hour elective required annually by June $10\text{th}$ to keep a broker's license active.