Legal Loopholes Part 1
If you have ever signed a contract of sale and not long afterwards had buyer’s remorse, then read on to find out what technical defects there may be in the contract that may allow you to walk away from the transaction.
The Starting Point
Firstly, do not share your regrets with the real estate agent. If you do, then understand that they are the seller’s agent and it is very likely you will be advised that you have a “watertight contract” and there is no way you can walk away from the transaction.
Don’t be deterred either, by comments from the agent such as “I’ve been in this game 20 years now so take it from me, you’ve got a watertight contract.”
The reality is they probably haven’t got 20 years experience and their advice to you is based on just one year’s experience 20 times over. It might be worth getting legal advice.
What are the loopholes then?
- Is There A Contract?
For there to be a binding and enforceable contract there are a number of essential elements that must be satisfied under contract law.
Firstly, there must be an offer. Secondly, there must be an acceptance of that offer (or in the case of a counter offer, acceptance of the counter offer). Finally, and most importantly, there must be communication of acceptance by the person who accepts the offer (or the counter offer) to the other party. Without this fact being communicated to the other party or their solicitor then there isn’t a legal contract in existence.
If, for example, the contract of sale was signed by you as a buyer during the day and the agent collected it and visited the seller later that evening to attempt to persuade them to accept your offer, until you receive a copy of a contract signed by the seller or alternatively advice from his agent that they have accepted your offer and signed the contract, there is no contract.
If you do not hear from the agent during the course of the evening and you have cold feet the next morning you need to immediately instruct your solicitor to fax the agent with your instructions that as no acceptance of your offer has been communicated to you, your offer is withdrawn. In that situation there is no contract of sale.
This example also illustrates why a legally educated real estate agent will always ring you as a buyer no matter how late at night it might be to “congratulate” you on your successful purchase. You know now it is more that just good PR to do so. It is essential to lock you into the contract.
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