Real estate contracts must be left to the professionals, but it is good to know what is involved and what to expect. Every contract must include mutual assent, consideration, competent parties and a legal purpose.
To have mutual assent means that both parties must voluntarily consent to be bound by the terms of the contract. It includes two key elements of a contract: the offer and acceptance. An offer is a promise to act in a certain way in exchange for another acting in a certain way. To be valid, an offer must be clear and intended to be an offer. Accepting an offer means that the parties are willing to be bound by the terms of the contract. Any contract longer than a year must be in writing to uphold the Statute of Frauds and consent must be given free of fraud, duress or misrepresentation.
How Can Offers Be Terminated?
An offer can be terminated in a variety of ways:
Competent parties means that all parties have the legal capacity to be bound to the terms of the contract. Minors, 18 years and younger, are not legally competent, nor are insane persons or someone that is so intoxicated that they do not understand the contract or its terms.
Legal purpose means that a contract is written for a legal purpose. It does not violate the law, commit any crimes or involve dual contracting (writing two contracts in a way that misleads the lender).
Elements of a Contract
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