09-05-2008, 09:47 AM
As I recall my Business Law class and Real Estate Law class, and other experience with contracts, a properly written contract is binding as long as all the elements of a binding contract are met.
It can be written on a cocktail napkin IF all the elements are met.
IF
IF any of the elements are not met, it may be invalid or voidable.
A contract for the sale of real property must be substantially in writing.
It is an oral contract that is no good; the form of writing (handwritten or typed) is not what counts although it sure makes an impression if it looks like a legal document.
So unless you are 100% clear on the elements of a contract, why not use a contract that an attorney has reviewed which you KNOW has all the binding elements? One reason a contract may be invalid is if there was not a "meeting of the minds" on the terms. There is a reason for having all the terms spelled out carefully, to avoid ambiguity.
And although a contract may be a legal binding contract, in the case of real estate the contract should also specify remedies, recourse, rights to recission, and who pays legal fees in the event of a dispute, whether arbitration is mandatory, etc..
In general, attorneys fees are not recoverable as part of your damages if you sue for breach of contract unless it is specified in the contract.
The wonderful thing about escrow for the buyer is that your purchase money is still yours until the sale records. And for the seller, you retain title until you get your money. As far as I'm concerned, any other way of buying real estate is too risky, even from family and friends.
*not an attorney. This is what I was taught by attorneys in law classes. YMMV*
It can be written on a cocktail napkin IF all the elements are met.
IF
IF any of the elements are not met, it may be invalid or voidable.
A contract for the sale of real property must be substantially in writing.
It is an oral contract that is no good; the form of writing (handwritten or typed) is not what counts although it sure makes an impression if it looks like a legal document.
So unless you are 100% clear on the elements of a contract, why not use a contract that an attorney has reviewed which you KNOW has all the binding elements? One reason a contract may be invalid is if there was not a "meeting of the minds" on the terms. There is a reason for having all the terms spelled out carefully, to avoid ambiguity.
And although a contract may be a legal binding contract, in the case of real estate the contract should also specify remedies, recourse, rights to recission, and who pays legal fees in the event of a dispute, whether arbitration is mandatory, etc..
In general, attorneys fees are not recoverable as part of your damages if you sue for breach of contract unless it is specified in the contract.
The wonderful thing about escrow for the buyer is that your purchase money is still yours until the sale records. And for the seller, you retain title until you get your money. As far as I'm concerned, any other way of buying real estate is too risky, even from family and friends.
*not an attorney. This is what I was taught by attorneys in law classes. YMMV*