Contracts and Risk Management

Unit #1 Elements of a Valid Contract

Objectives

Upon completion of this lesson, the student should be able to:

Describe the elements of a valid contract and explain void and voidable contracts.

NOTE

This course uses the terms "licensee" and "representative" interchangeably to mean an agent that is affiliated with a broker.  The term "broker" is used to specify a designated broker, principal broker, or sponsoring broker who has affiliated licensees working for them.

Introduction

Contracts are an essential part of the transfer of real estate. It is important that you, as the real estate professional, are familiar with these contracts, know how to use them, and have the ability to explain the terms contained within these forms.

These forms aid in the development of a legally binding contract between the parties and express the terms, conditions, timeline, and promises of the seller and the purchaser.

Should an issue or dispute ever arise between the parties to a contract, these forms and their content will be of the utmost importance in arbitration or in a court of law?

In this course, we will be referring to the contract between the buyer and the seller for the purchase of real property as a Purchase and Sale Agreement (PSA).