Unit 5 Review

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ceg.gibson
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224570
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Unit 5 Review
Updated:
2013-06-21 15:52:07
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NC Real Estate Unit
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Unit 5 Review
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  1. What is an implied contract?
    A contract that is formed from actions rather than words
  2. Expressed contracts can be both..?
    Oral and written
  3. The statute of frauds dictates what or certain contracts to be enforceable?
    That they must be in writing
  4. What 3 contacts must be in writing according to the statute of frauds?
    • Contracts for the purchase or transfer or real estate
    • Purchase or option to purchase
    • Leases of 3 years or more
  5. Bilateral contacts are a ____ for a _____?
    promise for a promise (I promise to buy and you promise to sell)
  6. A unilateral contract is a promise exchange for the _____ of another?
    performance. (I promise to sell if you decide to buy, and option contract for example)
  7. What type of contact is binding on both parties?
    Valid
  8. What type of contract lacks one or more of the essential elements of a valid contract?
    Void
  9. What type of contract binds one party but not the other because of fraud, duress, or misrepresentation?
    Voidable
  10. What are the three stages of a contract?
    • Offer
    • Contract
    • Termination
  11. During the offer period of a contract, what is not usually required to be deposited?
    Earnest Money
  12. What must happen during the offer stage of a contract with any changes made?
    They must be struck through and initialed by all parties to be enforceable
  13. What are the things that can kill an offer before it becomes a contract?
    • Revoke from buyer
    • Rejection from seller
    • Any change to that offer (creates new counter offer)
    • Lapse of reasonable time (court decided)
    • Destroyed property
    • Death of either party
  14. Once a contract is formed what is usually then deposited based on state law?
    Earnest money
  15. An amendment changes what?
    Contract
  16. An addendum changes what?
    Offer
  17. What are the elements of a valid contract?
    • Contractual capacity
    • Offer and acceptance
    • Lawful Objective
    • In writing and signed
  18. To be competent for a contract what must you be?
    18, sane and sober
  19. When does a contract become binding?
    Upon communication of acceptance
  20. When the seller makes changes to the offer document, initials, and signs the offer, the seller has created a what?
    Counter offer
  21. Willful misrepresentation or omission is ____ of a material fact?
    Intentionally withholding or misinforming
  22. Because NC is a caveat emptor state, the seller does not have to disclose what?
    Anything regarding the condition of the property
  23. Even though a contract has to be in writing, it can be written how?
    On any format if the buyer and seller agree. Does not have to be on legal form
  24. The law assumes what by signing a contract?
    That both parties have read and understood
  25. Amendments must be in what format?
    Written and signed by all parties
  26. In NC, contracts are assignable unless?
    language in the contract prohibits it
  27. What is novation?
    Transfers all contract rights and liabilities. (new contract replaces old contract)
  28. What is the one thing that cannot terminate most contracts?
    Death.
  29. What is one thing regarding contracts that do terminate in the even of a parties death?
    The offer
  30. A seller that takes fixtures after closing that were not excluded in the contract would be in?
    Breach
  31. What are the 5 remedies a non breaching party has against a breaching party?
    • Acceptance of partial performance (choose not to sue)
    • Unilateral rescission (nonbreach chooses to back out because of failure of other party)
    • Specific performance (sue to force performance of contract)
    • Liquidated damages (retaining deposit and only if stated in contract)
    • Actual damages (sue for money lost)
  32. In a purchase contract from the NCAR, what is the sellers sole remedy for a buyers breach in contract?
    Retention of earnest money
  33. What does a purchase agreement do?
    Creates conditions for closing
  34. When does an offer become an executory contract?
    When the last party has signed, the other party notified, and communication of acceptance has been made
  35. What is an option?
    The potential buyer purchases the right to buy at a fixed price for a designated term
  36. An option is what type of contract?
    Unilateral
  37. When the potential buyer decides to purchase in the option period, what does the contract then become?
    Bi-Lateral
  38. What is a sale leaseback?
    When the owner sells the property and leases it back
  39. What is a lease purpose?
    I promise to let you occupy and you promise to pay rent
  40. What are the essential elements of a lease?
    • Names of lessor and lessee
    • Description of property
    • Rent Terms
  41. What is a net lease?
    Tenant pays base plus some expenses
  42. What is a percentage lease?
    Rent based on gross income of sales or business
  43. What is a ground lease?
    Lease on unimproved property
  44. What is a full service lease?
    Base rent plus prorated share of building operating expenses
  45. When does an estate for years expire?
    Expiration date (not death)
  46. When does a periodic estate terminate?
    Upon notice (not death)
  47. When does an estate at will terminate?
    Death or notice
  48. What is actual eviction?
    Court action brought by landlord because tenant is in breach
  49. What is constructive eviction?
    Tenant moving out because of breach from landlord

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