Chapter 1
Property Rights and Interests
Course: Texas Real Estate Exam Prep
Subject: Texas State Salesperson Exam Prep
Chapter: Contract Law And Practice Of Texas Real Estate Salesperson Exam Prep
A contract is a legally enforceable agreement between two or more parties. Texas follows common law contract principles with specific statutes governing real estate contracts.
Four Essential Elements (Remember: "COLA")
C - Competent Parties
Definition: All parties must have legal capacity to contract
Requirements for Competency:
- Age: Must be 18 or older (age of majority in Texas)
- Mental Capacity: Must understand nature and consequences of agreement
- Legal Authority: Must have right to contract (not under guardianship, power of attorney if signing for another)
Special Situations in Texas:
Minors (Under 18):
- Contracts are VOIDABLE by the minor (minor can cancel, but adult cannot)
- Exception: Contracts for necessities (food, shelter, medical care) may be enforceable
- Emancipated minors can contract in certain circumstances