Term
Written or Oral
(Creating Contracts) |
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Definition
Statute of Frauds provides that real estate contracts MUST BE IN WRITING UNLESS IT IS A LEASE FOR 1 YEAR OR LESS TO BE ENFORCEABLE . If more than 1 year and not in writing it is valid but not enforceable
Note: Valid=legal
enforceable= can be brought to court to be enforced |
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Term
VALID OR VOID
(Creating Contracts) |
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Definition
A Valid Contract is one that contains the 4 essential legal elements: CALL
1. Competent Parties
2. Mutual Assent
3. Consideration
4. Lawful Purpose
EARNEST MONEY IS NOT AN ESSENTIAL ELEMENT OF A CONTRACT
A void contract is not a contract at all and never was |
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Term
Voidable
(Creating Contracts) |
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Definition
| A contract in which all of the essential elements of a valid contract are present however one or more of the elements may be removed at the option of the party who has acted under a disability. Only one injured party has the right to rescind or disaffirm but may choose to complete the contract according to the terms. |
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Term
| 4 VOID CONTRACTS (ALL OTHER SCENARIOS BECOME VOIDABLE CONTRACTS) |
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Definition
1. Inadequate Legal Description
2. Legally declared mentally impaired prior to signing
3. Mutual Mistake
4. Illegal/Lawful Purpose |
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Term
Executory and Executed
(Creating Contracts) |
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Definition
Executory=1 or both parties have not yet performed "something needs to be done"
Executed=the deed is final step therefore it is an executed document "all things have been done" |
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Term
Bilateral and Unilateral
(Creating Contracts) |
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Definition
Bilateral=Both parties make a promise and have obligations
Unilateral=only 1 party is making a promise and only that party is obligated. Ex. open listing, Option to buy lease |
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Term
Minors
(Competent Parties)
(Essential Elements of a Contract- CALL) |
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Definition
VOIDABLE
A contract signed by a minor is voidable at the minor's option. The action can be taken anytime until reaching the age of majority or within a reasonable time thereafter, but failure to disarm the contract in a timely fashion might cause it to become binding |
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Term
Mentally incompetent
(Competent Parties)
(Essential Elements of a Contract- CALL) |
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Definition
VOID
Legally declared Mentally incompetent and signs a contract creates a void contract.
ILLITERACY IS NOT THE SAME AS INCOMPETENCY. ILLITERATE SIGNERS CAN SIGN WITH A HAPPY FACE AND AS LONG AS THEY UNDERSTAND THE TERMS, THE CONTRACT IS VALID AND ENFORCEABLE |
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Term
Intoxicated
(Competent Parties)
(Essential Elements of a Contract- CALL) |
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Definition
VOIDABLE
Signed by a party who was under the influence of alcohol or drugs can decide to void or not to void |
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Term
Corporation
(Competent Parties)
(Essential Elements of a Contract- CALL) |
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Definition
A corporation is a legal entity created under authority of the state.
With a corporate resolution, the board of directors authorizes certain officials to sign and to bind the corporation in contract matters. |
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Term
Court Appointees
(Competent Parties)
(Essential Elements of a Contract- CALL) |
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Definition
| Appointed by court as administrators, trustees or guardians receive the authority to sign contracts from the court. |
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Term
Meeting of the Minds
(Essential Elements of a Contract) |
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Definition
Mutual agreement. everything has been agreed to. Mutual agreement is reached through the process of offer and acceptance/ delivery and acceptance. Form contracts require notice to be in writing and will specify the method of communication. The notice may be considered effective and considered to have been received either when actually received or when sent. If no means of acceptable notice is expressed in the contract, notice should be communicated by the same method of communication as the offer.
Actual Communication= informed directly by word or in writing and the offer becomes a contract when this word is received
Constructive communication=becomes a contract when notice is sent |
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Term
| Use of Forms in Real Estate Contracting |
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Definition
Typed provisions take precedence over pre printed
Handwritten takes precedence over Typed
Handwritten takes priority |
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Term
Destruction of Property
(Discharge of Contractual Obligations) |
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Definition
A real estate contract may give the buyer or the seller the option of cancelling the contract if the property is destroyed or substantially damaged before the transaction is completed.
Does not automatically terminate a buyer contract. Terminates a seller contract and listing rights are revoked. |
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Term
Specific Performance
(Remedies provided by Law)
(Remedies for breach of contract) |
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Definition
| When a buyer is suing a seller the first step is to file a tender with the seller which is a formal offer to perform under the terms of the contract. If the seller refuses to perform, the buyer might also file a lis pendens, alerting other buyer prospects to avoid this property until the suit is settled. |
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Term
Statute of Limitations
(Remedies provided by Law)
(Remedies for breach of contract) |
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Definition
referring to time
defines the time within which an injured party has the right to seek a legal remedy |
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Term
Option Contracts
(Real Estate Contracts) |
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Definition
Unilateral Contract
property owner (optioner) agrees to give a prospective buyer or lessee(optionee) the right to buy or lease the property for a certain price and within a certain time limit.
Only gives the buying option does not give the right to occupy |
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Term
Land contracts
(Real Estate Contracts) |
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Definition
Seller retains title and buyer makes payments
Buyer receives equitable title.
Used when sufficient financing is not available to the buyer from a lending institution.
Seller will keep legal title and will remain responsible for payments on ay mortgage loans on the property. |
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Term
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Definition
IN GA Closing Attorneys represent the LENDER
Closing functions typically performed by the closing attorney |
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