CONTRACT LAW 010 . . . err . . . I mean 101

By
Real Estate Broker Owner with BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time Licensed State of Oregon

I am NOT an attorney, and I don't play one on T.V.

But I AM a licensed Real Estate Agent, Broker in the State of Oregon. 

Real estate IS all about legal.  Sure it's "location, location, location.  But it's also "legal, legal, legal!"

It's the "LAW of Agency" . . . that governs who represents whom, for example.

When it comes to property, land, chattel, personal property, fixtures . . . ALL fall under:

CONTRACT LAW

Contracts have to MEET THE TEST:  In order for a contract to be valid, there are specific "tests" which have to be met.  They are 1) Consideration, 2) Mutual Agreement, 3) and a few other things -- and since I'm NOT an attorney I forget!  I think "performance" is another one (a CLOSE DATE would be "performance" since the parties are agreeing on a specific TIME for events under the contract to take place.)

Contracts CAN BE VERBAL!  And acceptance CAN BE ORAL.  Not a good idea.  So always get it in writing!

When you buy a cup of coffee, it's under CONTRACT!  Consideration can be done with a POS (point of sale) transaction.  I go in to my favorite coffee shop, and there are the "terms and conditions" -- it's called a MENU!  In this type of situation, I have NO bargaining power.  I either pay the $3.65 for a double-latte, choco-mocho, grande decaf no foam -- or I don't.  The coffee shop is OFFERING their goods, I can either agree to purchase, or not.  To form a valid contract there does not need to be negotiation.  When I PAY the $3.65, that is the consideration.  There is also mutual acceptance -- I'm agreeing to the price of a 6 oz coffee -- why?  I haven't the foggest . . . but I pay!  And performance takes place when I get my cup of coffee -- which is MORE then I would pay for a gallon of gas . . . sorry, call it my "VENTE". 

If I don't get my cup of coffee, the coffee house breached the contract, and I would be entitled to 'remedies' -- either another cup of coffee without charge OR they refund my money.

Think you can handle the contract?  Fine . . . list the home yourself. 

Think you can write up your own offer?  Fine . . . put pen to paper and remember . . .

Buying real estate IS NOT like buying a cup of coffee.

MISTAKES CAN BE MADE -- which is why I deliberately erred on my title.  Would you be able to tell if a mistake was made on your contract?  A seasoned, licensed Realtor(r) would!!

One final word about contracts:  It's the "burden" of the person (entity) preparing the contract to write it containing language that benefits them.

HUH??

That $3.65 cup of coffee was priced to BENEFIT the owners of the coffee shop . . .  'Nuff said!

Do yourself a favor:  Find yourself a GOOD Realtor(r)!  Someone who UNDERSTANDS the contract they will prepare in your behalf (whether selling OR buying  --  a contract IS involved!)

 

Posted by

Buyer Focused ~ Buyer Results

 

Representing Buyers in the Portland Metro Real Estate Market | Clackamas Multnomah and Washington Counties | Since 1999

Carla Muss-Jacobs, REALTOR®, ABR, CEBA, ePro
Principal Broker/Owner

Direct: 503-810-7192 | BuyersAgentPortland.com | Carla@BuyersAgentPortland.com

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Comments 47 New Comment

Rainer
26,570
DriveBuy Technologies
DriveBuy Technologies

In my Texas real estate classes, I learned that oral contracts are valid and enforceable in theory, but good luck presenting adequate proof. That said, Texas is a one-party recording state, so getting conversations on record is that much easier.

August 18, 2009 11:37 AM
Rainer
38,629
Christopher Horlacher
Esq.
DHR, P.L.

I am an attorney....and I wish I could also play one on TV---and I could not agree more with you; legal, legal, legal.  Proof of that is how many deals don't close because of some legal aspect of the deal.  Further proof is just how many times buyers and sellers sign their names on pieces of paper throughout the home buying/selling process. Contract law is confusing and complex.  It goes way beyond mere offer, acceptance, consideration, and a lack of defenses.  That being said, I believe that a grasp of the basics goes a long way for agents, brokers, buyers and sellers. 

A great point was made above; CONTRACT LAW IS STATE SPECIFIC.  Many business law classes offered in colleges are based upon the Uniform Commercial Code Article II.  UCC Article 2 is not itself the contract "law of the land."  While it has been adopted by states (I think all states but LA)...you must understand YOUR states contract law.  States modify the UCC and you must be aware of the differences.  Furthermore, you could have taken a contract law class taught using the 2003 UCC Article 2 modifications which have not been adopted by a single state.

I am happy to say that the best brokers and agents I have met know contract law very well.  I doubt knowing contract law has itself made them great at their job.  But, I think the drive to be great led them to realize that a firm grasp on contract law is one of the skills necessary to thrive and also to protect themselves.

October 03, 2009 06:15 PM
Rainmaker
1,202,853
Carla Muss-Jacobs, Principal Broker/Owner
Buyer Focused ~ Buyer Results
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time

Hi Christopher -- thank you so much for your (more than) 2 cents.  As a "Fiduciary" it's important to know what that means. 

October 03, 2009 11:56 PM
Rainer
76,914
Stefan C. Jezycki
Pacific Union International - Christie's Great Estates

So when discussion commission with a seller and they bring up some sort of reduction this is one of the points that I make. The seller is trying negotiate at the wrong time or with the wrong person. A qualfied and seasoned Realtor can show there value and save the seller much in excess, dollarea and future legal protection, than the 1% or so many sellers try to negotiate.

Great post.

 

Stefan in the Napa Valley

October 07, 2009 12:50 PM
Rainmaker
1,202,853
Carla Muss-Jacobs, Principal Broker/Owner
Buyer Focused ~ Buyer Results
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time

Stefan . . . now, now, now . . . everyone is entitled to their business model ;-)  But the saying "you get what you pay for" certainly does have merit!

October 07, 2009 07:05 PM
Rainmaker
1,202,853

Carla Muss-Jacobs, Principal Broker/Owner

Buyer Focused ~ Buyer Results
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Author Bio: Carla Muss-Jacobs is the Principal Broker/Owner of Buyers Agent Portland, LLC an Exclusive Buyer Agency representing Buyers in the Portland Metro real estate market since 1999.

The Sellers have their own agent ~~ Why don't you have yours?  

Carla Muss-Jacobs practices the TRUE FORM of Buyer Agency ~~ Exclusive Buyer Agent.  Her office/brokerage never takes listings and never respresents the Seller.  Exclusive Buyer Agency is the BEST form of legal real estate representation a Buyer can have.  There is 100% Buyer Representation - !00% of the Time.  There are NO CONFLICTS OF INTEREST and there is no possibility of ever having YOUR Buyer Agency comprised.  When buying a house -- it's important to know who is working for you!!