1. Texas Real Estate Contracts 4 th Edition © 2015 OnCourse Learning

2. Chapter 1: Introduction to Contracts © 2015 OnCourse Learning

3. What is a Contract: An Overview A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. © 2015 OnCourse Learning

4. Elements of a Contract the mutual assent of the parties shown by offer and acceptance consideration capacity of the parties legality and sometimes a writing © 2015 OnCourse Learning

5. Purpose of a Contract The purpose of any contract is to set out the terms and conditions of the agreement between the parties. © 2015 OnCourse Learning

6. Classification of Contracts Express vs. Implied Unilateral vs. Bilateral Valid vs. Unenforceable Void vs. Voidable Executed vs. Executory © 2015 OnCourse Learning

7. Express vs. Implied An express contract is a contract created by an expression of the parties. This expression may be either verbal or written. An implied contract is a contract that is not created by any expression of the parties, but is inferred from the circumstances of the transaction. © 2015 OnCourse Learning

8. Unilateral vs. Bilateral A unilateral contract is a contract where one party to the contract makes a promise and the other party accepts by performance. A bilateral contract is a contract where one party to the contract makes a promise in exchange for a promise by the second contracting party. © 2015 OnCourse Learning

9. Valid vs. Unenforceable A valid contract is a contract which has all of the essential elements of a contract and is, therefore, enforceable in a court of law. An unenforceable contract is a contract which for some reason can not be enforced. © 2015 OnCourse Learning

10. Void vs. Voidable A void contract is a contract that does not exist under the law, that is, the contract has failed to include all of the essential elements necessary to the creation of a valid contract. A voidable contract is a valid contract, but which may be legally avoided at the option of one of the parties. © 2015 OnCourse Learning

11. Executed vs. Executory An executed contract is a contract which has been completely performed by the parties. An executory contract is a contract that has not been completed. © 2015 OnCourse Learning

12. --Death of a party during the executory period When a party dies, the real estate transaction grinds to a halt until the rights and/or title of the parties are resolved in a probate court. © 2015 OnCourse Learning

13. --Loss of the property during the executory period The Uniform Vendor and Purchaser Risk Act states that the risk of the loss is on the seller unless the buyer is in possession. © 2015 OnCourse Learning

14. --Divorce of the sellers during the executory period Where a lawsuit involves the seller's real estate, a lis pendens is typically seen in the county deed records to put third parties on notice. © 2015 OnCourse Learning

15. --Bankruptcy of the seller during the executory period Where a voluntary or involuntary bankruptcy occurs during the pendency of a real estate sales contract, federal law provides that the trustee in bankruptcy may assume or reject any executory contract or unexpired lease of the debtor. © 2015 OnCourse Learning

16. Sources of Contract and Real Estate Law © 2015 OnCourse Learning Constitutional law Statutory law Regulatory law Case law

17. Federal Law United States Constitution – United States Code Federal Statutes – United States Code Federal Regulations – Code of Federal Regulations – Federal Register © 2015 OnCourse Learning

18. Federal Law cont. Federal Case Law – United States Supreme Court United States Reports – Federal Appellate Courts Federal Reporter – Federal District Courts Federal Supplement © 2015 OnCourse Learning

19. State Law Texas Constitution – Vernon’s Texas Constitution Texas Statutes – Vernon’s Texas Civil Statutes – Vernon’s Texas Codes Texas Regulations – Texas Administrative Code – Texas Register © 2015 OnCourse Learning

20. State Law cont. Texas Case Law – Texas Supreme Court South Western Reporter – Texas Appellate Courts South Western Reporter – Texas Lower Courts © 2015 OnCourse Learning