Breach of Contract

Violation of any terms or conditions in a contract without legal excuse; for example , failure to make a payment when it is due.

Assignment

The transfer in writing of interest in a contract, mortgage, lease, or other instrument.

Bilateral Contract

An agreement entered into by two or more legally competent parties that is binding on all parties.

Competent Parties

Those recognized by law as being able to contract with others; usually those of legal age and with sound mind.

Consideration

1. That which received by the grantor in exchange for a deed.

2. Something of value that induces a person to enter a contract (Consideration may be valuable e.g. money or good, love and affection).

Contingency

Certain happening without which a contract will not be valid.

Contract

An agreement entered into by two or more legally competent parties by the terms of which one or more of the parties, for a consideration, undertakes to do or refrain from doing some legal act or acts.

Counteroffer

A new offer made as a reply to an offer received.

Earnest Money

Money deposited by a buyer that is applied to the purchase price if the sale is closed

Equitable Title

The interest held by a vendee under a land contract or an installment contract; the equitable right to obtain absolute ownership to the property when legal title is held in another's name. 

Escape Clause

Protection for seller with a contract is subject to the sale of buyer's present home. 

Executed Contract

1. A contract in which all parties have fulfilled their promises and thus performed the contract.

2. A signed contract

Executory Contract

A contract under which something remains to be done by one or more of the parties.

Express Contract

An oral or written contract in which the parties state the contract terms and express their intention in words.

Implied contract

A contract under which the agreement of the parties is demonstrated by their acts and conduct. 

Liquidated Damages

Sum agreed upon to serve as compensation if one party defaults.

Land Contract

Sometimes called "contract for deed" or an "installment sales contract" where seller retains fee ownership; and the buyer secures possession and an equitable interest in the property.

Novation

Substitution of a new contract for an existing one.

Offer and Acceptance

Two essential components of a valid contract; a "meeting of the minds," when all parties agree to exact terms. 

Option

An agreement to keep open for a set period an offer to sell or purchase property.

Parol Evidence Rule

Agreement that the written contract override spoken promises.

Specific Performance

Court action asking that the parties complete the transaction as contracted.

Riscission

Seven calendar days from signing in which developments that are promoted with comprehensive advertising or incentive programs may be rescinded by the purchaser for any reason.

Statue of Frauds

The part of state law requiring certain instruments such as deeds, real estate sales contracts, and certain leases to be in writing for them to be legallly enforceable.

Statue of Limitations

The law pertaining to the period of time within which certain actions can be brought to court.

Time is of the Essence

A phrase in a contract that requires the performance of a certain act within a stated period of time.

Unenforceable Contract

A contract that seems on the surface to be valid, yet neither party can sue the other to force performance on it.

Unilateral Contract

An agreement that is binding on only one of the parties.

Valid Contract

A contract that complies with all of the essentials of a contract and is binding an enforceable on all parties to it.

Voidable contract

A contract that seems to be valid on the surface but may be rejected or disaffirmed by one of the parties.

Void contract

A contract that has no legal force or effect because it does not meet the essential elements of a contract.