Contracts

Question 1

What is a contract

Answer 1

A legal agreement.

Can be in writing, verbal or implied.

Question 2

What are the requirements for a contract to be enforceable?

Answer 2

1) . Offer
2) . Acceptance
3) . Consideration
4) . Legal purpose
5) . Competent parties

Question 3

If a seller dies during escrow, the buyer can force the seller’s estate to continue w/ sale.

Answer 3

If the buyer dies during escrow, the sales contract is terminated.

Question 4

What is breach of contract?

Answer 4

It is failure of a party to perform a contractual promise.

A breach occurs when a party defaults under terms of the contract.

Question 5

A remedy is

Answer 5

A legal redress which allows a wrong to be corrected.

The intent is to put the non-breaching party in the same position as if contract is fulfilled.

Question 6

If a buyer breaches the contract, the seller ( by owning legal title to property) is allowed to seek remedy

Answer 6

If the seller breaches the contract, the buyer (by obtaining equitable title in the property) is allowed to seek a remedy

Question 7

What is Equitable Title

Answer 7

Equitable title is what the buyer receives upon signing of the sales contract

Question 8

A court determines a remedy by rendering a judgement

Answer 8

Judgement usually includes monetary damages.

If money won’t remedy the wrong. The court can award an equitable remedy, such as specific performance

Question 9

What is specific performance?

Answer 9

Specific Performance is specifically enforcing the contract as written.

Question 10

Available Remedies under the Purchase Contract

Answer 10

For the Buyer
). Action for Damages. Damages awarded in civil Lawsuit. Awarded amt. is the difference between contract price and the market value on the date of the breach plus incidentals I.e. out of pocket expenses.

2). Specific Performance is a court order requiring the contract to be fulfilled.
Allows the buyer to force the seller to sell the property.

For the seller

Action for damages
Retaining the deposits as liquidated damages.

Question 11

A non reaching party has the right to seek damages, if he chooses.

Answer 11

Even tho the non breaching party is entitled to an equitable remedy, he cannot seek both.

A party can never seek a double remedy. He can see only 1 remedy.

The court desires to make the non breaching party whole, not more than whole