The last lesson, when we talked about elements of the treaty, was the premise that an agreement containing all the essential elements would be a valid and applicable contract. But that`s not quite the truth. Some contracts that appear to be technically valid are unenforceable and have no legal value. In this lesson, we will discuss the legal effects of valid treaties and how treaties can be invalidated and unenforceable. The consideration can be valuable to everything a person does or gives, including personal services. Remember the exclusive right to sell agreements from the last lesson. In these agreements, a seller gives a broker the exclusive right to sell a property and agrees to pay a fee to the broker if the property is sold, even if the seller – not the broker – finds the buyer. What consideration does the agent provide in this case? Can`t the agent sit back and wait for the seller to sell the house? Since unspoken contracts are usually only a problem if there is no written contract, they are rare in real estate, as the statutes of fraud impose in writing almost all real estate contracts. Contracts can be divided into two categories: express contracts and unspoken contracts.
An explicit contract is a contract by which the intention of the parties and the terms of the agreement are declared or expressed in writing or orally by the parties. In addition, a contract may be related to the behaviour of the parties, the language used or the things they have accomplished, or other relevant circumstances involved in the transaction. Time is essential because it is an important lever in a real estate purchase contract, because without this clause, time – well – is not essential. Consider the following story. Charlie agrees to buy Lucy`s house, and the contract says the closure will take place on September 12. The deadline is approaching and Charlie calls Lucy and says he`s not quite ready yet. There`s a problem with the loan and it`s going to take him a few more days. Lucy says, “Okay.” They are planning a new closure by September 19. Just before the new closure, Charlie calls back and tells Lucy that he only needs a few days. What can Lucy do? If the contract does not contain a “time is essential” clause, Lucy may not do much except wait patiently. Although the contract set a date for the conclusion, the contract did not say that the date was important.
Courts are used to getting contracts whenever possible. If Charlie tries to happen, but he needs more time, a court is likely to say that the delay is not an offence unless the delay becomes excessive. In the last lesson, we talked about some of the contracts that you will probably find as a real estate agent. As you will recall, we have said that two people enter into a contract when they agree to take action for each other and intend to make their agreement legally enforceable. Another common example of real estate transfers is when lenders allocate mortgage income streams to third parties. The practice is so common that final documents explicitly mention the problem and buyers often receive transfer notifications shortly after closing – except at the time of closing itself.