Exam II - FINC 371 Questions & Answers 100% Correct!!
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Course
- FINC 371
Institution
- FINC 371
Necessary Elements of a Contract - ANSWEROffer
Acceptance
Consideration
Parties with Capacity
Lawful Purpose
Offer - ANSWERStatement that specifies the position of the maker of the offer (called the offeror)
Receiving party is called an offeree - Offer becomes a VALID CONTRACT when it is ...
Exam II - FINC 371 Questions & Answers 100% Correct!!
Necessary Elements of a Contract - ANSWEROffer
Acceptance
Consideration
Parties with Capacity
Lawful Purpose
Offer - ANSWERStatement that specifies the position of the maker of the offer (called the offeror)
Receiving party is called an offeree - Offer becomes a VALID CONTRACT when it is ACCEPTED by the
party who receives it
Acceptance - ANSWERExpresses satisfaction with an offer, must mirror the precise terms &
conditions stated in the offer
Counteroffer - ANSWERThe original offeror and offeree SWITCH legal positions, and a contract may
result when a counteroffer is accepted
Acceptance of contract indicated by signatures of all parties
Consideration - ANSWERAnything that incurs a legal detriment or the forgoing of a legal benefit
Each party of contract must give up something
i.e. Land for $$$
Capacity of Parties - ANSWERAll parties must have the mental capability to know what the contract
represents and to understand its terms
Categories of people that lack contractual capacity - ANSWERThose declared "Mentally Incompetent"
,Minors (Typically younger than 18 years of age)
Writing Requirement - ANSWERAll contracts involving land or items attached to it must be in writing
before a court will enforce them
Financing Contingency
Title Contingency
Inspection & Repair Contingency
Financing contingency - ANSWERClause in a sales contract that permits the cancellation of the
contract if the buyer cannot successfully obtain financing for the purchase of the property according
to the terms specified in the sales contract
Title contingency - ANSWERClause in a sales contract that cancels the contract if the seller cannot
provide clear title to the buyer
Inspection and repair contingency - ANSWERClause in a real estate contract that permits the buyer to
have a qualified inspector examine the property for any physical defects that the seller may be
obligated to repair
Option-to-Buy Contracts - ANSWERAgreement between a property owner and a potential buyer that
states that the property owner agrees to keep an offer open for acceptance during a stated period of
time
Contract for Deed - ANSWERSeller retains legal title to property until the agreed-on amount is paid
Attorney or closing agent's fees for preparing the deed or other documents
Documentary stamp taxes, where required
Recording fees for the certificate of satisfaction of the seller's mortgage
Escrow Closing - ANSWERNot Face-to-Face
3rd party, Escrow Agent, acts as an intermediary to facilitate the closing
Real Estate Sales Process - ANSWERListing
Marketing the property and qualifying buyers
Presentation and negotiations
Contracts
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