47 terms

Unit 12 Indiana Real Estate

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Terms in this set (...)

Contract
Voluntary agreement or promise between legally competent parties supported by legal consideration to perform (or refrain) some legal act
Express Contract
State the terms and show their intentions in words either oral or written
Implied Contract
Agreement of the parties is demonstrated by their acts and conduct
Statute of Frauds
Requiring certain contracts be in writing
Bilateral Contract
BOTH parties promise to do something
Unilateral Contract
One-sided agreement
Executed Contract
One in which all parties have fulfilled their promises; also refer to signing of contract
Executory Contract
One or both parties still have an act to perform
Elements of Contract
Offer and Acceptance
Consideration
Legally competent parties
Consent
Legal purpose
Offeror
Person who makes offer
Offeree
Person to whom an offer is made
Offer
Promise made by one party requesting something in exchange for that promise
Acceptance
Promise by the offeree to be bound by the exact terms proposed by the offeror
Revocation
Offeror revokes offer
Consideration
Something of legal value offered by one party and accepted by another as an inducement to perform or to refrain from performing some act
Consent
Contract must be entered into by consent as a free and voluntary act of each party
Legal Purpose
Contract must have a legal reason for existence
Legally Competent Parties
They must be of legal age and have enough mental capacity to understand the nature or consequences of their actions in the contract
Valid Contract
Has all legal elements
Void Contract
Lacks one or more elements and has no legal force or effect
Voidable
Has all legal elements on its face but it may be rescinded or disaffirmed
Unenforceable
Appears to have all legal elements but cannot be enforced in court
Time is of the Essence
Each of the elements of the contract must be performed within the specified time
Assignment
Transfer of rights or duties under a contract
Novation
substitution of a new contract for an existing contract
Breach of Contract
Violation of any of the terms or conditions of a contract
Suit for Specific Performance
Looking to enforce an action
Sue for Damages
Looking for monetary compensation
Liquidated Damages
Clause in contract specifies the amount of money to which the seller is entitled if the buyer breaches the contract
Statute of Limitations
Time during which parties to a contract may bring a legal action or lawsuit to enforce their rights
Rescission
returns parties to their original positions before the contract so any monies or property exchanged must be returned
Sales Contract
Contains the complete agreement between a buyer of a parcel of real estate and its seller
Counteroffer
New offer; it rejects the original offer
Earnest Money
A purchaser provides a deposit when making an offer to purchase real estate
Equitable Title
The interest one has in a property when they don't have legal title
Contingencies
Conditions that must be satisfied before a sales contract if fully enforceable
Mortgage Contingency
Protects the buyer earnest money in the event that the buyer is unable to secure a mortgage on the property
Inspection Contingency
Provides the buyer may obtain certain inspections of the property and may cancel the contract if the inspections indicate an unsatisfactory or unsafe property condition
Property Sale Contingency
Protects the buyer who has to sell a home in order to but the seller's property
Lienholder Approval
Contract in short sale
Amendment
Change or modification to the existing content of a contract
Addendum
Any provision added to an existing contract
Option
A contract by which an optionor gives an optionee the right to buy or lease the owner's property at a fixed price within a certain period of time
Owner Financing
Seller provides credit for all or part of the funds that will allow the buyer to move forward with the transaction
Purchase Money Mortgage
Buyer receives title to the property but places a security interest on it -the mortgage- in favor of the seller
Land Contract
The purchase of property that calls for transfer of title at a later date
Parole Evidence Rule
The legal premise that whatever is in writing is the entirety of the agreement