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Chapter 8 - General Legal Principles, Theory and Concepts about Contracts - NC Real Estate Practice 8th Edition

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Section 1

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Legal affect of Counteroffer

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Date created

Mar 14, 2020

Cards (38)

Section 1

(38 cards)

Legal affect of Counteroffer

Front

Rejects the original offer. Offeror is relieved of original offer.

Back

4 Elements of a Valid Contract

Front

Legally competent parties, mutual assent or deliberate agreement, legality of object, consideration.

Back

Specific Performance

Front

To force the other party to perform the contract as agreed when each party has the ability to perform the contractual obligations.

Back

Executed Contract

Front

"Closed" A contract that has been completely performed by both parties.

Back

Compensatory Damages

Front

Injured party may sue the breaching party for money damages for only what is necessary to make the party whole.

Back

Valid Contract

Front

Contract that complies with all the essential elements of a contract; is binding and enforceable on both parties. Earnest Money Deposit in NOT required.

Back

Consequential Damages

Front

Special damages upon breach that were reasonably forseeable to the breaching party at the time of contract. Allows injured party to sue for lost profits.

Back

Void Contract

Front

Contract that has no legal force or effect. Does not meet the essential element of a contract.

Back

Mutual assent or deliberate agreement

Front

An offer by one party that is accepted by the other party.

Back

Revocation of an offer

Front

An offer is withdrawn by the offeror at any time prior to acceptance if communicated directly to the offeree or their agent.

Back

Statute of Limitations

Front

Law pertaining to the period of time within which certain actions must be brought to court or be lost.

Back

Assignment

Front

Substitution of parties; transfer of rights or duties but no the liabilities under a contract to a third party. Does not terminate the contract or change the terms of the contract.

Back

Discharge of Contract

Front

To Cancel a contract by partial performance, substantial performance, impossibility of performance, mutual agreement, or operation of law.

Back

Rescission

Front

Contract is declared invalid and both parties return to the position they were in before they entered the contract. May be appropriate when facts were misrepresented or one party entered the contract under duress.

Back

Counteroffer

Front

Any attempt by the offeree to change any of the terms proposed by the offeror. Any changes must be initialed by each party.

Back

New Condominium right of rescission

Front

7 days

Back

Time-Share right of rescission

Front

5 days

Back

Legally competent parties

Front

Both parties to the contract must be of legal age and have sufficient mental capacity. NC - 18 is the age of contractual capacity

Back

time is of the essence

Front

Contract must be performed within the time limit specified. Any party who has not performed on time is liable for breach of contract.

Back

Consideration

Front

Something of legal value, bargained for and given in exchange for a promise or act.

Back

Reality of Consent

Front

To be valid, every contract must be signed as the free and voluntary act of each party.

Back

Offer and Acceptance

Front

The terms of the agreement must be fairly definite and understood by both parties. Must be actually communicated to the offeror.

Back

Statute of Frauds

Front

requires all contracts for the transfer of an interest in real estate to be in writing. Only exception being leases of a certain period.

Back

Auction

Front

A form selling property where oral bids are taken and the property is sold to the highest bidder.

Back

Liquidated Damages

Front

Earnest Money Deposit - money that will compensate the injured party for breach, parties agree to amount at the time of contract.

Back

Voidable Contract

Front

Contract that seems to be valid but may be rescinded, or disaffirmed based on some legal principle.

Back

Mere Crier of Sales

Front

exempt from real estate licensure.

Back

Bilateral Contract

Front

A contract in which a promise is given for the promise of another. It becomes binding when mutual promises are communicated. (A real estate contract). "I will do this, AND you will do that."

Back

Default/Breach of Contract

Front

A violation, without legal excuse, of any of the terms or conditions of the contract.

Back

Auctions WITHOUT reserve

Front

Seller agrees to accept the high bid, no matter what the terms of that bid. Also called absolute auction.

Back

Unenforceable Contract

Front

Contract that has all the elements of a valid contract; however , neither party can sue the other to force performance. Example: Oral agreement

Back

Novation

Front

Substitution of NEW contract for an existing agreement with the intent of extinguishing the old contract. Terminates the original contract.

Back

Parol Evidence Rule

Front

Common Law - no oral agreements that contradict the terms of a written contract may be considered in a lawsuit based on the written agreement.

Back

Contract

Front

a legally enforceable 'voluntary' promise between 'legally competent' parties, supported by 'legal consideration', to do or refrain from doing a 'legal act'.

Back

Legality of Object

Front

Contract must not contemplate a purpose that is illegal or against public policy.

Back

Executory Contract

Front

"Pending" A contract that has not as yet been fully performed.

Back

Unilateral Contract

Front

A contract whereby only one party is obligated to perform his obligation to another. "I will do this IF you do that."

Back

Auctions WITH reserve

Front

Seller reserves right to stop the bidding if high bid is not acceptable. Must reject all bids before the auction is concluded and the auctioneer accepts a bid.

Back