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Contract Basics (Part 1) | Real Estate Exam Prep Videos - YouTube
Channel: The Real Estate Classroom
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in today's video we're going to start a
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series on contract basics and this is
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video number one we're going to get into
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the definition and then some terms you
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need to know regarding statuses of
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contracts all of that in this video
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everybody my name is Paul with Jessie
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and welcome to the real estate classroom
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YouTube channel it's just a place simply
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that if you're studying for your real
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estate licensing exam you could come and
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watch videos like this one to help you
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pass that exam real quick before we get
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started give this video a thumbs up hit
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that subscribe button click on that
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little notification bell and please
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share this with anybody that's trying to
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pass their real estate licensing exam I
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would appreciate that so the first thing
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we're going to talk about is the
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definition of a contract what's the
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definition of a contract well the
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definition is pretty simple it's a
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voluntary agreement between two or more
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parties to either perform or not perform
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and they come to a meeting of the minds
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regarding the subject matter so what
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does that mean well it means that the
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buyer and seller for example agree that
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once the purchase contracts agree to
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that both parties are going to perform
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they're gonna follow through with what
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they said an example of non-performance
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would be a no-compete clause in
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employment law the employer says I'll
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hire you but you're going to sign this
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no-compete clause that says that if you
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quit then for the next two years after
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you quit you cannot compete against us
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so that is where the agreement to not do
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something meaning meeting of the minds
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that's a term you have to know a meeting
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of the minds simply means that the buyer
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and seller have agreed for example to
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the terms of the contract or the
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landlord tenant has come to an agreement
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on the terms of that lease agreement and
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the subject matter is the reason for the
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contract okay so that's the definition
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of a contract now there are two more
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terms you have to know implied contract
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and expressed contract now an implied
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contract simply means that the the terms
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of the contract or the meeting of the
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minds have occurred through actions they
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were not verbally or written it was the
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act of the parties let me give you a
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real live example several years ago here
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in Omaha a contractor put up siding on
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the wrong
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house and when the owner of that house
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discovered what was going on the owner
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did not say anything
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so by implication the owner agreed for
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the sighting to go up and when the
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contractor was done and gave the kana
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that the invoice to the owner the owner
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set up no I didn't agree to this so the
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contractor sued because they said it was
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an implied contract an express contract
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is real easy it means expression so the
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the two parties express their intent now
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an express contract can be oral or
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verbal or it can be in writing alright
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so a purchase contract a lease agreement
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the landlord tenant they are expressing
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their intention in the contract so the
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tenant says for five hundred bucks a
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month I'll rent your place and the
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landlord says great here are the keys
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now whether that's oral or written the
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they have expressed their intentions and
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and they have agreed to it so an express
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contract is where the parties express
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their intentions two more concepts you
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have to know bilateral and unilateral
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now bilateral means by more than one
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this is where once a contract is agreed
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to that it is binding the way I
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remembered the difference is bi
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bilateral means binding on both parties
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once it's agreed to common real estate
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contracts that are bilateral or lease
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and the purchase contract both of those
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are examples of bilateral contracts a
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unilateral means uni or one common
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contracts that we see in real estate are
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options and listing contracts now
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unilateral contracts means that it's
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binding on one party but not necessarily
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the other give you an example an option
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contract so the owner is bound under the
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option contract to not sell the property
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for a certain period of time
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however the holder of the option has the
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option to either exercise the option and
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purchase the home or when that contract
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expires says I'm walking away I'm not
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gonna buy it so it's binding on the
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owner but not the person holding the
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option so that's why it's unilateral and
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the same with the listing contract two
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more concepts executory in exact
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executed contracts an executory contract
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means that the terms of the contract are
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not completed yet give you an example
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the the the purchase contract at the
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point that the buyer and seller agreed
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to the terms and they sign their name
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that is a legally binding contract but
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it hasn't closed yet so that period
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between contract and close the contracts
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status is considered executory and the
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terms have not been completed or
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fulfilled yet but what's closing happens
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then the contract is executed meaning
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all the terms of the contract have been
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completed so that's the difference
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between those two and the last one I
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want to talk about is a dual contract
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simply because the licensing exam folks
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have been asking this question dual
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contract means two or more contracts
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typically it's two and here's what it
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means so the buyer and seller agree to a
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purchase price of $100,000 and they
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write up a purchase contract but then
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they write up a second one for a hundred
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and twenty five thousand now this
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contract goes to the lender now the real
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purchase price is a hundred thousand but
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the lender believes it's a hundred and
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twenty five thousand because that's the
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contract that the lender gets this is
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fraud and it is not legal dual contracts
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and I point this out because anytime you
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see dual in a licensing exam question
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you have to determine whether they're
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talking about dual contracts or dual
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agencies which are totally two separate
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concepts all right that's all I got for
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this video if you're going to continue
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studying click on
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video right there it will help you in
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please have not subscribe to the channel
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click the subscribe button
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see you in the next
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