The Real Estate Contract

Question 1

General SOF Rule

Answer 1

1) description of the property; 2) identification of the parties; 3) signed by the party to be charged

Question 2

Part-Performance Exception

Answer 2

1. Possession alone triggers part-performance
2. Possession and partial payment required
3. Possession and the making of valuable, long-lasting improvements
4. Possession and change of position of buyer causing irreparable harm
5. No recognition of the doctrine

Question 3

Equitable Estoppel

Answer 3

A party may use EE if [they] have reasonably relied [unequivocal referability] on the contract to such extent that injustice can only be avoided by specific performance

Question 4

Essential Terms of Real-Estate Contract

Answer 4

Date of Sale, Purchase Price, etc.; Courts may fill the gap if it is not stated; however, the contract is invalid if the parties intend to set terms and they are omitted.

Question 5

Formal v. Informal Agreements

Answer 5

1. Brokers might use informal contracts as a placeholder for agreements; if the material terms are the same, the casual contract will be enforceable.
2. If terms are pending change, then the contract is not enforceable.

Question 6

Oral Termination

Answer 6

An oral agreement may rescind written conveyances for an interest in the property. Nienberg v. Feld, (Colo. 1955).

1) When duties have yet to be performed
2) Consideration for the agreement may be the relief of obligations
3) Parol evidence modifications are ineffective as an incomplete land sale is unenforceable

Question 7

Frustration of Purpose

Answer 7

Where the mutual agreement for entering the contract is frustrated; Buyer Beware – did not know and could not have known v. could have known and should have known

Question 8

Time of the Essence

Answer 8

Time is generally NOT of the essence unless made explicit, indicated by the nature of the agreement, or implied by the parties’ conduct.

Question 9

When Essence May Be Delayed

Answer 9

Reasonable delay under the circumstances

Question 10

Void for Vagueness

Answer 10

Condition Precedent(s) – require specific details for “due diligence” in performance; do not leave clauses for interpretation

Question 11

Marketable Title

Answer 11

Encumbrances on title that a reasonable person would be put on notice to potentially not want to complete the sale

Works as an implied covenant, and does not become due until the closing day

Question 12

Emcumbrance Examples

Answer 12

Lein, Adverse Title, Easements, etc.

Question 13

Title acquired by Adverse Possession is free from encumbrances but requires suit to quiet title or to convince the court of title