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Real Estate Contracts

Real Estate Contracts. Contract Law. A contract must be: voluntary an agreement or a promise made by legally competent parties supported by legal consideration about a legal act Contracts may be express or implied

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Real Estate Contracts

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  1. Real Estate Contracts

  2. Contract Law • A contract must be: • voluntary • an agreement or a promise • made by legally competent parties • supported by legal consideration • about a legal act • Contracts may be express or implied • Express simply means that the parties state the terms and show their intentions in writing.

  3. In Alabama all contracts concerning real estate must be in writing. • A good example of an implied contract is what happens when you go into a restaurant and order a meal. • Unilateral vs. bilateral contracts. • Executed vs. executory contracts.

  4. Essential Elements of a Valid Contract • Offer and acceptance – there must be a meeting of the minds (mutual assent) • What happens when there is a counter-offer? • An offeror may revoke the offer at any time before receiving the acceptance! • Consideration – something of legal value. • There must be a definite statement of consideration in a contract.

  5. Reality of consent • A mistake, misrepresentation, fraud, undue influence, or duress would result in a contract that is voidable. • Legal purpose • Legally competent parties

  6. Validity of Contracts • A contract can be valid, void (has no legal force), or voidable. • Unenforceable • Doesn’t mean that both parties could not go ahead and fulfill the contract.

  7. Discharge of Contracts • Performance • Assignment • Novation • Breach of contract • One remedy is a suit for specific performance • Other reasons for termination: • Partial performance, substantial performance, impossibility of performance, mutual agreement, operation of law, recission.

  8. Contracts Used in Real Estate • Listing agreements • Real estate sales contracts • Options • Land contracts or contracts for deed • Leases and escrow agreements • If a contract contains any ambiguity, the courts generally interpret the agreement against the party who prepared it.

  9. Review of Real Estate Forms

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