Real Estate Contracts

There are various forms of real estate contracts in real estate transactions. Generally, the contracts control the transaction involving the seller, buyer, broker, lender etc.

 

Types of contract:

1. Valid contract: A valid contract refers to an instrument that satisfies all legal requirements. A valid contract contains all the essential elements required by law.


2. Void contract: A void contract has no legal effect. The parties to the contract have no legal agreement; they have no legal obligation that can be either ratified or enforced. A void contract is for practical purposes no contract. Any contract for an illegal purpose would conform to this definition.


3. Voidable contract: It may be enforced or rejected at the option of one of the parties. It is also unenforceable against the same party. The case arises in a contract involving a minor. The minor has the option of holding the adult to the contract, yet the adult may not enforce the contract against the minor. The contract is voidable by the minor. 


4. Unenforceable contract: An unenforceable contract, in the case of real estate would be an oral contract conveying an interest in real estate. Although, the contract might be valid between the parties, it would be unenforceable if either party elected not to perform under his or her oral agreement.


5. Express contract: Most real estate contracts are express in that the parties declare terms, conditions and their intended by written or oral statements.


6. Implied contract: It is an agreement evidenced by acts and conduct. Suppose that in the absence of a written agreement, a managing agent arranges for the replacement of a broken window in a rented dwelling. The owners inspect the word and have no comments. It is implied that the owner consents to the repair.


7. Bilateral contract: It refers to a promise that is exchanged for a promise; “I will pay you TK. 5000 to reproof my house.”


8. Unilateral contract: It is promise that is exchanged for an act; “I will pay you a commission of 7 percent if you sell my house during the next 60 days”

 

Elements of an enforceable contract:

1. In writing


2. Parties competent to contract


3. A lawful object


4. A consideration


5. An offer and acceptance


6. A legal description


7. Proper signatures