National portion

Contracts & Agency vocabulary

11 terms, defined plainly. Where a term is commonly confused with another, the definition says so — that confusion is usually the wrong answer.

Counteroffer

A response changing the offer's terms — it REJECTS and terminates the original offer; the original cannot later be 'accepted'.

Consideration

Something of legal value exchanged by each party — required for a valid contract.

Statute of frauds

Requires real estate contracts to be in WRITING to be enforceable — an oral sale contract is unenforceable, not void.

Void vs. voidable

Void: no legal effect ever (illegal object). Voidable: valid until a protected party elects to cancel (minor, fraud victim).

Specific performance

Court remedy compelling a breaching party to perform the contract — available because land is unique.

Liquidated damages

Damages amount agreed IN the contract (commonly the buyer's earnest money on buyer default).

Fiduciary duties (OLD CAR)

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care — the six duties an agent owes the principal. The C is Confidentiality.

Special agent

Agent with limited authority for one transaction (a listing broker). A GENERAL agent has broad ongoing authority (a property manager).

Dual agency

One brokerage representing both parties in the same transaction — lawful only with the informed written consent of both (some states use other constructs, e.g. Texas intermediary).

Novation

Substituting a new contract or party for an old one, releasing the original obligor — vs. assignment, where the original party stays liable.

Earnest money

The buyer's good-faith deposit held in escrow/trust — NOT required for contract validity; consideration is the mutual promises.