Unit 5 Review
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What is an implied contract?
A contract that is formed from actions rather than words
Expressed contracts can be both..?
Oral and written
The statute of frauds dictates what or certain contracts to be enforceable?
That they must be in writing
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
Bilateral contacts are a ____ for a _____?
promise for a promise (I promise to buy and you promise to sell)
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)
What type of contact is binding on both parties?
What type of contract lacks one or more of the essential elements of a valid contract?
What type of contract binds one party but not the other because of fraud, duress, or misrepresentation?
What are the three stages of a contract?
During the offer period of a contract, what is not usually required to be deposited?
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
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
Once a contract is formed what is usually then deposited based on state law?
An amendment changes what?
An addendum changes what?
What are the elements of a valid contract?
- Contractual capacity
- Offer and acceptance
- Lawful Objective
- In writing and signed
To be competent for a contract what must you be?
18, sane and sober
When does a contract become binding?
Upon communication of acceptance
When the seller makes changes to the offer document, initials, and signs the offer, the seller has created a what?
Willful misrepresentation or omission is ____ of a material fact?
Intentionally withholding or misinforming
Because NC is a caveat emptor state, the seller does not have to disclose what?
Anything regarding the condition of the property
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
The law assumes what by signing a contract?
That both parties have read and understood
Amendments must be in what format?
Written and signed by all parties
In NC, contracts are assignable unless?
language in the contract prohibits it
What is novation?
Transfers all contract rights and liabilities. (new contract replaces old contract)
What is the one thing that cannot terminate most contracts?
What is one thing regarding contracts that do terminate in the even of a parties death?
A seller that takes fixtures after closing that were not excluded in the contract would be in?
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)
In a purchase contract from the NCAR, what is the sellers sole remedy for a buyers breach in contract?
Retention of earnest money
What does a purchase agreement do?
Creates conditions for closing
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
What is an option?
The potential buyer purchases the right to buy at a fixed price for a designated term
An option is what type of contract?
When the potential buyer decides to purchase in the option period, what does the contract then become?
What is a sale leaseback?
When the owner sells the property and leases it back
What is a lease purpose?
I promise to let you occupy and you promise to pay rent
What are the essential elements of a lease?
- Names of lessor and lessee
- Description of property
- Rent Terms
What is a net lease?
Tenant pays base plus some expenses
What is a percentage lease?
Rent based on gross income of sales or business
What is a ground lease?
Lease on unimproved property
What is a full service lease?
Base rent plus prorated share of building operating expenses
When does an estate for years expire?
Expiration date (not death)
When does a periodic estate terminate?
Upon notice (not death)
When does an estate at will terminate?
Death or notice
What is actual eviction?
Court action brought by landlord because tenant is in breach
What is constructive eviction?
Tenant moving out because of breach from landlord
What would you like to do?
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