Contract Law Flashcards
6 cards from real BC Real Estate Trading Services Course practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Contract Law flashcards as text
What are the essential elements required for a valid real estate contract in BC?
Answer: Offer, acceptance, consideration, capacity, legality, and genuine consent
A valid contract requires: (1) Offer — a clear proposal; (2) Acceptance — unconditional agreement to the offer; (3) Consideration — something of value exchanged; (4) Capacity — parties must be legally competent; (5) Legality — the purpose must be lawful; (6) Genuine consent — free from misrepresentation, duress, or undue influence.
Under the BC Law and Equity Act, what is required for a real estate contract to be enforceable?
Answer: It must be in writing and signed by the party to be charged, as required by the Statute of Frauds provision
The Law and Equity Act (which incorporates the Statute of Frauds) requires contracts for the sale of land to be in writing and signed by the party against whom enforcement is sought. Oral agreements for real property are generally not enforceable in BC, though exceptions may exist under the doctrine of part performance.
What is a 'subject clause' in a BC real estate contract?
Answer: A condition that must be satisfied before the contract becomes binding, such as 'subject to financing' or 'subject to inspection'
A subject clause (condition precedent) is a condition that must be fulfilled within a specified time period for the contract to become firm and binding. Common examples include 'subject to financing,' 'subject to satisfactory inspection,' and 'subject to review by buyer's solicitor.' If the condition is not met or waived, the contract may be terminated.
What happens if a buyer fails to complete a real estate purchase in BC after removing all subjects?
Answer: The seller may keep the deposit and potentially sue for damages, including the difference between the contract price and the eventual sale price
Once all conditions are removed and the contract is firm, the buyer is legally obligated to complete the purchase. If they default, the seller can retain the deposit as liquidated damages and may also sue for additional damages, which could include the difference between the contract price and a lower subsequent sale price, plus costs.
What is the 'doctrine of misrepresentation' and how does it apply to BC real estate?
Answer: A false statement of fact made by one party that induces the other to enter a contract, which may entitle the misled party to rescission or damages
Misrepresentation occurs when a false statement of material fact induces someone to enter a contract. It can be fraudulent (intentional), negligent (careless), or innocent. In BC, a misled party may seek rescission (cancellation) of the contract or damages. Real estate licensees have a duty to verify information and avoid making false statements.
What is an 'assignment' of a real estate contract in BC?
Answer: The transfer of a buyer's rights and obligations under a contract to a third party before completion
Assignment occurs when a buyer transfers their rights under a purchase contract to another party (the assignee) before the completion date. The assignee steps into the original buyer's position. In BC, assignments are subject to specific tax rules and disclosure requirements, and the contract must permit assignment unless otherwise restricted.