Chp 11 Real Estate Contracts
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Any provision added to an existing contract
without altering the content of the original. Must be signed by all parties.
A change to the existing content of a contract
(i.e., if words or provisions are added to or deleted from the body of the
contract). Must be initialed by all parties.
The transfer in writing of interest in a bond,
mortgage, lease, or other instrument.
Violation of any terms or conditions in a
contract without legal excuse; for example, failure to make a payment when it
Breach of contract
(1) That received by the grantor in exchange for
his or her deed. (2) Something of value that induces a person to enter into a
A provision in a contract that requires a
certain act to be done or a certain event to occur before the contract becomes
A legally enforceable promise or set of promises
that must be performed and for which, if a breach of the promise occurs, the
law provides a remedy. A contract may be either unilateral. By which only one
party is bound to act, or bilateral, by which all parties to the instrument are
legally bound to act as prescribed.
A new offer made in response to an offer
received. It has the effect of rejecting the original offer, which cannot be
accepted thereafter unless revived by the offeror.
Relevant information or facts that are known or
should have been known.
Money deposited by a buyer under the terms of a
contract, to be forfeited if the buyer defaults but to be applied to the
purchase price if the sale is closed.
The interest held by a vendee under a contract
for deed or an installment contract; the equitable right to obtain absolute
ownership to property when legal title is held in another’s name.
The trust account established by a broker under
the provisions of the license law for the purpose of holding funds on behalf of
the broker’s principal or some other person until the consummation or
termination of a transaction.
A contract in which all parties have fulfilled
their promises and thus performed the contract.
A contract under which something remains to be
done by one or more of the parties.
See implied agreement.
See installment sale.
An amount predetermined by the parties to a
contract as the total compensation to an injured party should the other party
breach the contract.
Substituting a new obligation for an old one or
substituting new parties to an existing obligation.
Two essential components of a valid contract; a
“meeting of the minds.”
Offer and acceptance
An agreement to keep open for a set period an
offer to sell or purchase property.
The practice of one party canceling or
terminating a contract, which has the effect of returning the parties to their
original positions before the contract was made.
That part of a state law that requires certain
instruments, such as deeds, real estate sales contracts, and certain leases, to
be in writing to be legally enforceable.
Statue of frauds
In the seller breaches a real estate sales
contract, the buyer may sue, asking the court to force the seller to go through
with the sale and convey the property as previously agreed.
Suit for specific performance
A phrase in a contract that requires the
performance of a certain act within a stated period of time.
Time is of the essence
A contract that has all the elements of a valid
contract, yet neither party can sue the other to force performance of it. For
example, an unsigned contract is generally unenforceable
A one-sided contract wherein one party makes a
promise so as to induce a second party to do something. The second party is not
legally bound to perform; however, if the second party does comply, the first
party is obligated to keep the promise.
A contract that complies with all the essentials
of a contract and is binding and enforceable on all parties to it.
A contract that has no legal force or effect
because it does not meet the essential elements of a contract.
A contract that seems to be valid on the surface
but may be refected or disaffirmed by one or both of the parties.
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