FL Exam sec 11 - Real Estate Contracts 12% Verified Answers

FL Exam sec 11 - Real Estate Contracts 12% Verified Answers Contracts (in general) ️agreement between two or more parties to do or not to do certain things -valid -contains all valid essentials -void - lacks one essential -voidable - maybe valid or void by one of the parties -enforceable - courts will enforce -unenforceable - courts cannot enforce Authority of real estate licensees to prepare contracts ️Licensees may not draw lease agreements but fill in blanks on lease instruments on lease periods that dont exceed one year that are preapproved by florida supreme court. Allowed to assist buyers and sellers fill in blanks on four types of standardized contracts drafted by attorney and made available through local realtor boards and associations : -listing agreement -buyer brokerage agreement -sale and purchase contract -option contract listing agreement (4 types of contract) ️is brokers employment contract with seller. typically sales associate that obtains listing buyer brokerage agreement (4 types of contract) ️employment contract with buyer sale and purchase contract (4 types of contract) ️contract between buyer and seller. if licensee is agent and facilitator for one or both parties licensee may prepare sale and purchase contract option contract (4 types of contract) ️agreement to keep an offer open for specified period of time an offer to sell or lease real property. advised to tell buyer or seller to have attorney draw up an options contract. valid contract ️complies with provisions of contract law. contains 4 essential elements -contractual capacity of the parties -offer and acceptance -legality of object -consideration contractual capacity of the parties (4 essentials of contract) ️not everyone can make a valid contract, they must be COMPETENT (no legal mental defects or insanity and be of legal age) offer and acceptance (4 essentials of contract) ️parties must come to: -MEETING OF THE MINDS - parties must reach agreement on all terms in contract offeror makes offer and offeree accepts legality of object (4 essentials of contract) ️provisions spelled out in contract must be for legal purpose. example: if contract states that assistant will take commission, its UNENFORCEABLE because this is illegal. consideration (4 essentials of contract) ️whatever is given in exchange for something else -earnest money deposit is NOT the consideration -deposit is made to show seller, buyer is serious- seller promises to sell and convey, buyer promises to pay 2 types of CONSIDERATION -valuable consideration -good consideration valuable consideration ️money or promise that can be measured in terms of money good consideration ️promise that cannot be measured by money; such as love and affection statute of frauds ️requires that contracts conveying an interest in real property and contracts not to be performed within one year of date created must be in WRITING and SIGNED to be enforceable. contracts covered by Florida's statute of frauds include: -purchase and sale contracts -options contracts -deeds and mortgage instruments -lease agreements longer than a year -listing agreements longer than a year statute of limitations ️time during which terms of contract may be enforced. protects people from being sued after a period of time has expired -written is 5 years -oral (PAROL contracts) is 4 years enforceable contract ️legally binding contract that Florida court will recognize transfer of real property ️oral real estate contract doesn't make it ILLEGAL but are difficult to prove. there are exceptions, such as buyer seller verbally agree. buyer pays part of purchase price and takes possession, court will recognize contract. void contract ️lacks one or more required elements of valid contract. example: using a forged name