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CARE Prin. Ch. 5-D
Real Estate Contracts: Definitions
| Term | Definition |
|---|---|
| Valid | Binding and enforceable |
| Void | No legal effect, no contract |
| Voidable | One party can cancel due to fraud, duress or undue influence, but the other side cannot cancel |
| Unenforceable | Appears valid, but cannot be enforced in court |
| Status of Frauds | Requires that certain contracts, including real estate contracts be in writing to be enforceable. |
| Capable of Contracting | At least 2 or more parties must have the legal capacity to contract |
| Mutual Consent | Parties must mutually agree to be bound by the terms of the contract |
| Lawful Object | Contract must have lawful object – object refers to what is required to be done or not done |
| Sufficient Consideration | Benefit conferred or agreed to be conferred on the person making the promise or on any other person |
| Statute of Frauds | In the CA Civil code that a real estate contract must be in writing to be enforceable in court |
| Parole Evidence | A rule that states oral evidence may not be used to modify a written contract that appears to be complete. |
| Full performance | A normal situation, where both parties accomplish what they set out to do in the contract. |
| Breach of contract | One party on the agreement did not fulfill their part of the agreement |
| Specific performance | Allows the seller or buyer to sue the part in default to complete the contract and by or sell the property. |
| Liquid damages | Allows the seller to keep the buyer’s earnest money if the buyer is in breach of the agreement |
| Exclusive Authorization and right to sell listing | Broker is entitled to a commission no matter who sells the property including the owner during a specific time period. |
| Executed contract | All actions completed by both parties |
| Executory contract | Actions still need to be completed by one or more parties |
| Expressed | Parties have formally agreed on acts verbally or through a written agreement |
| Implied | Parties have not formally agreed on acts verbally or through a written agreement. Created by actions |
| Unilateral contract | Created by one party extending a promise to another. One sided |
| Bilateral contact | Promise from one person is made in exchange for a promise to another person. Ex. Seller & Buyer |
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