As Realtors we have fine tuned our contracts, and sought legal council to ensure the agreements we write will stand the test of legal scrutiny.

In order for a contract to be valid, the written document must clearly define the offer, be accepted by both parties; contain consideration (something of value, usually money) have legal purpose, and must involve legally competent parties.

Under the “statute of frauds” our contracts must be in writing in order to enforce the agreement (involving real estate). Our contracts are said to be “bilateral” meaning both parties promise to do something (seller agrees to sell and buyer agrees to buy). Once a “meeting of the minds” occurs it is said the parties have mutual accent and therefore a binding contract. Baring some element missing from the contract it is a valid agreement and should be fully enforceable.

All further issues that may occur after a valid contract is signed must now be mutually accepted by the parties to the contract. If a home inspection reveals a necessary repair and the buyer and seller wish to modify the original agreement this would have to be spelled out and acknowledged (signed) by both parties. Often due to unforeseeable factors the closing date could change and unless there is a “time of the essence” clause in the contract both parties generally agree to modify the transfer of title date.

If one of the parties to the agreement fails to perform their obligation(s), this would be considered a “Breach of Contract” and it is a violation without a legal excuse. The party that was harmed by the breach may seek a remedy known as “Specific Performance” in this case they would be asking the court to force the other party to go through with the sale under the terms previously agreed too. The other alternative is to seek monetary damages in a suit for cause, the amount can be “Liquidated Damages” (the amount held in escrow as good faith deposit money) or in some cases the entire purchase price plus expenses related to the contract and subsequent legal suit can be awarded.

Tort law and case studies fill libraries the world over with examples of contracts that have been breached, the best way to avoid these problems is to know you’re responsibilities before you sign.

As experienced real estate professionals we do our best to protect our clients, and would recommend the use of a real estate attorney when ever a legal question arises. With thousand of completed transactions in my 20+ years practicing real estate I would be happy to work with you on solving your property questions.

Please do not hesitate to contact Alpine Lakes Real Estate for any of your real estate needs.