1 Chapter 11 Real Estate ContractsThe signing of a valid real estate contract is the keystone of a real estate transaction.

2 Contract Law A Contract is a: voluntary agreement or promise betweenlegally competent parties supported by legal consideration to perform (or not perform) a legal act Modern Real Estate Practice 17th Edition

3 Types of Contracts Express or Implied Bilateral or UnilateralExecuted or Executory Modern Real Estate Practice 17th Edition

4 Elements of a Valid ContractOffer and acceptance Consideration Reality of consent Legal purpose Legally competent parties Modern Real Estate Practice 17th Edition

5 Validity of Contracts Valid: meets all the essential legal elementsVoid: lacks some or all of the essential legal elements Voidable: appears to be valid, but may be rescinded or disaffirmed by one or both parties based on some legal principle Unenforceable: appears to be valid but neither party can sue the other for performance Modern Real Estate Practice 17th Edition

6 Discharge of ContractsPerformance: “time is of the essence” Assignment: transfer of existing contractual rights or duties Novation: substitution of a new contract in place of the original Modern Real Estate Practice 17th Edition

7 11 Contracts Termination Breach Statute of LimitationsPartial Performance Substantial Performance Impossibility of Performance Mutual Agreement Operation of Law Rescission Modern Real Estate Practice 17th Edition

8 Contracts Used in the Real Estate BusinessListing Agreements Buyer Agency Agreements Real Estate Sales Contracts Options Land Contracts or Contracts for Deed Leases Escrow Agreements Modern Real Estate Practice 17th Edition

9 Sales Contract Issues Offer Counteroffer Acceptance BinderEarnest Money Deposit Equitable Title Destruction of the Premises Liquidated Damages Contingencies Amendments and Addendums Disclosures Modern Real Estate Practice 17th Edition

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