Transcript OFFERS, CONTRACTS AND RELATED ISSUES Power Pt

OFFERS, CONTRACTS
AND RELATED ISSUES:
EFFECTIVE CONTRACT
WRITING
COURSE OBJECTIVES
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To provide a substantive review of
offers, contracts and related issues to
assist licensees to do the following:
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More effectively explain to clients and
customers the process and the documents
for writing offers and amending contracts
Prepare offers and contracts that are both
well-written and legally enforceable
COURSE OBJECTIVES
(CONTINUED)
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To revisit the distinction between an “offer”
and a “contract”
To review essential elements of a contract
To review additional elements required for
valid real estate contracts
To examine documents for the presence of
required elements and the consequent
“status” of such documents
To review the methods by which contracts
are discharged and the implications thereof
I. THE DEFINITION OF AN
OFFER
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A.
A proposal intended to create a contract upon
acceptance by the person to whom it is made.
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The offer must state expectations with specificity.
Terms of a bona fide offer must be certain enough to be
accepted in court.
Names of parties and identification of the subject matter must
be included clearly
An offer must be communicated to be effective.
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Actual communication occurs when an offer is received
Constructive communication occurs whether the offeree,
having received the offer, reads it or not.
DEFINITION OF AN OFFER
(CONTINUED)
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B. Generally, an offeror may withdraw an offer at any
time before the offeree accepts the offer:
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Actual communication of revocation makes it effective
Communication to agent representing offeree might be
sufficient
Implied revocation: the offeree learns from a reliable source
that the offeror has acted in a manner not compatible with the
outstanding offer
DEFINITION OF AN OFFER
(CONTINUED)
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C. An offeree may simply reject an offer by
communicating to the offeror a refusal to accept the
offer:
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A counteroffer by the offeree is an implied rejection
Deciding to accept after communicating a rejection is still a
rejection
New attempt to accept a rejected offer results in nothing more
than a counteroffer
DEFINITION OF AN OFFER
(CONTINUED)
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D. An offeror may specify an expiration date for an
offer:
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A purported acceptance after the expiration date is ineffective.
If no date is specified, the offer lapses after a reasonable
period of time.
DEFINITION OF AN OFFER
(CONTINUED)
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E. What an offer “is not”!
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An offer is not a binding agreement between the
offeror and the offeree.
An offeror is not bound to accept an “acceptance” of
an offer, although some other obligation might
accrue by reason of some other agreement.
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e.g., a seller listing agreement
e.g., a buyer representation agreement
DEFINITION OF AN OFFER
(CONCLUDED)
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F. For an offer to ripen into a contract, the
offeree must accept the terms of the offer:
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Ready, willing, and able acceptance
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Communication of the acceptance
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Acceptance of the “acceptance” by the offeror
II. DEFINITION OF A
CONTRACT
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A voluntary, legally enforceable promise
between two competent parties to perform a
legal act in exchange for a consideration.
A legally enforceable promise or set of
promises that must be performed and for
which, if a breach of the promise occurs, the
law provides a remedy.
III. THE ELEMENTS OF A
CONTRACT
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Competent parties
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Offer and acceptance
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Consideration
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Lawful purpose
IV. ADDITIONAL ELEMENTS FOR
REAL ESTATE PURCHASE
CONTRACTS
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Legal description
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Compliance with the Statute of Frauds
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Virginia contract law
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Does not invalidate oral contracts
Prevents the enforcement of an oral contract
Addresses enforceability
V. DISTINGUISHING FEATURES
OF CONTRACTS
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Bilateral vs. unilateral
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Express vs. implied
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Executory vs. fully executed
VI. STATUS OF A CONTRACT
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VALID
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VOIDABLE
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VOID
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UNENFORCEABLE
VII. SPECIFIC
CONSIDERATIONS
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Ratification
Earnest money deposits
Equitable title
Contingencies and conditions
Standard clauses
Disclosures
Disclaimers
Personal property sale agreements
Bills of sale
VIII. DISCHARGE OF
CONTRACTS
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Performance
Assignment
Novation
Anticipatory breach, breach, and legal remedies
Rescission
Termination
IX. ANCILLARY DOCUMENTS
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Addenda
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Amendments
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Parol evidence and the Rule
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Release of contract
THE “ABC’S” OF CONTRACT
WRITING: AGREEING TO AGREE
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A’s:
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Agreements
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Amendments
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Addenda
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Affirmations
THE “ABC’S”
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(CONTINUED)
B’s:
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Bona fide offers
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Bilateral features
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Bifurcated conditions
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But “what” if “not”
THE “ABC’S”
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(CONCLUDED)
C’s:
Contracts
 Contingencies
 Clauses
 Covenants
 Closings
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