2. Suit for Specific Performance: Because no two pieces of property are alike, the buyer
wants this house, at this time and asks the court to enforce the contract. 3. Suit for Damages: Because a party may have expenses to the contract (such as an appraisal or moving) the injured party asks the court to make the other party pay damages. Out of pocket expenses such as appraisals and moving are called compensatory damages and punishment for wrong doing damages are called punitive damages. The seller, if he is the wronged party, may wish to accept liquidated damages which would consist of any earnest money deposited for payment. If he accepts liquidated damages, he may not sue for Specific Performance. End of Page 12 . Other Contract Words Assignment of a contract: is when a third person takes the place of one of the original people in the contract. All the rights and responsibilities remain with the original party to the contract, unless both parties agree to the assignment in writing. The giver of an assignment is the Assignor; the receiver is the Assignee. Novation: is a change in the original terms, such as an extension of time for closing or loan commitment. All other terms of the contract remain the same. Contingency: means conditions or terms yet to be performed. A financing contingency means the buyer will buy the house on the condition that he receives the loan applied for. All contingencies must be met before a contract can be executed. Mirror Image: A seller agrees to an offer exactly as it was written. No changes are made to the offer; it is signed by the seller as it was written. Counteroffer: (also called qualified acceptance) is an attempt by the seller or buyer to change the terms proposed by the other party. Time is of the Essence: means the promises must be performed with a certain time frame or the party will be in breach of contract. Typical time frames to be used are for inspection, loan application, closing date, possession of the property or loan approval.
Parol Evidence Rule: anything in writing (like the contract) takes precedence over oral or verbal agreements. End of Page 13 . Types of Contracts in Real Estate Employment Agreement Florida sales associates are agents of their brokers. They are also “Independent Contractors” – meaning that they are not employees of the broker, but they have certain duties that they are expected to perform in order for the broker to properly supervise them. The associates also need to know what the broker will pay them and how the broker will support them in establishing and remaining in the real estate business. In order to understand the expectations of both parties, an employment agreement is created. This is an express contract between the sales associate and the broker. Sales associates who are negotiating with a broker for employment should ensure that all areas discussed are in writing so no misunderstandings of expectations on either side occur.
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