Real estate principles_powerpoint_for_chapter_07
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Transcript of Real estate principles_powerpoint_for_chapter_07
© OnCourse Learning
Chapter 7: Contract Law
CONTRACT
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A legally enforceableagreement to do (or notto do) a particular thing.
-Legally Enforceable Agreement
CONTRACT
Expressed - declareImplied - created by actionBilateral - promise exchanged for a
promiseUnilateral - promise exchanged for
performance© OnCourse Learning
Bilateral Contract
Promise for Promise
Unilateral Contract
Promise for Performance
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Legal Effect of Contracts
Valid - meets all requirements of law.Void - no legal effect & not a contract.Voidable - one party bound but not the
other.Unenforceable – may have been valid at
an earlier time but now enforcement is barred. © OnCourse Learning
Contract Essentials
Competent parties Mutual assentLawful objectiveConsiderationWritten
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© OnCourse Learning
MEETING OF THE MINDS
Offer
Acceptance Counteroffer
OfferAcceptance
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COUNTEROFFER
• Any change in the terms.
• Upon receiving the offer, the offeree has three options: to agree to it, to reject it, or to make a counteroffer.
• An offer can be revoked by the offeror at any time prior to the offeror hearing of its acceptance
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DURESS
Duress (use of force), menace (threat of violence), or undue influence (unfair advantage) cannot be used to obtain agreement.
An act intended to deceive for the purpose of inducing another to part with something of value
Mutual agreement requires that there be no fraud, misrepresentation, or mistake in the contract if it is to be valid
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FRAUD
• In each state there is a law that is commonly known as a statute of frauds.
• Its purpose is to prevent frauds by requiring that all contracts for the sale of land, or an interest in land, be in writing and signed to be enforceable in a court of law.
Statute of Frauds
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Effect as of March 1, 2001Authorizes electronic agreementsAllows for electronic signaturesState may supercede this legislation
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ESIGN ACT
Performance
• Most contracts are discharged by being fully performed or executed by the contracting parties in accordance with the contract terms.
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NOVATION
• the substitution of a new contract between the same or new parties.
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DECEASED PARTY
• If one of the contracting parties dies, a contract is considered discharged if it calls for some specific act that only the deceased person could have performed.
Breach of Contract
Partial performanceUnilateral RescissionMoney damagesSpecific performanceLiquidated damagesMutual RescissionStatute of limitations
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Key Terms
Breach of contract Competent party Consideration Contract Counteroffer Duress
Fraud Liquidated damages Power of attorney Specific performance Void contract Voidable contract
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