Breach of Contract in Real Estate
Navigating Breach of Contract Issues in Real Estate Agreements
Real estate contracts are the bedrock upon which the industry of real estate transactions are built. These written legal agreements specifically define the rights and responsibilities of each party involved in a transaction and attempt to keep all parties moving in the same direction towards closing a purchase and sale of property. However, like any legal arrangement, real estate contracts are subject to disputes and disagreements. When one party fails to fulfill their obligations, it can lead to what is known as a “breach of contract.” This article explores the issue of breach of contract in real estate transactions, from the essential elements that must be in place to the consequences that follow.
Have a different type of property-based dispute? See our helpful information on other types of real estate disputes in Oklahoma here.
Requirement of Written Agreement
Oklahoma law requires agreements for the transfer of an interest in real estate to be in writing. This legal principle is often called the “statute of frauds,” because without this rule, it could be possible for a party to fraudulently claim that there was an agreement for something as important as the sale of someone’s primary residence without any proof.
So, what does this mean for real estate transactions? Any agreement related to the sale, purchase, or transfer of real property should be documented in writing. This includes sale contracts, lease agreements, mortgages, and any other significant real estate-related contracts. The written document gives tangible evidence of the parties’ intentions, reducing the potential for misunderstandings and disputes.
Requirement of Signatures
Having a written contract is just the first step. The next critical element is the signature of the party against whom the agreement will be enforced. In other words, if Party A expects Party B to fulfill certain obligations outlined in the contract, Party B must have signed the document to be legally bound by its terms. This signature serves as an acknowledgment of their consent to be bound by the contract terms and conditions.
Without the signature of the party to be held accountable, a judge hearing a dispute over the contract will hesitate to enforce it against the other party. Thus, ensuring that all parties involved sign the contract is a fundamental aspect of creating a binding real estate agreement.
Timing and Performance
Timing is everything in real estate, including with real estate contracts. You will often see the phrase “time is of the essence” in written agreements – that’s crucial here.
When a contract designates a specific time for performance, it means that the parties must adhere to those timelines rigorously. If, for instance, a buyer is expected to provide the down payment within 30 days of executing the contract, that deadline is meaningful. Failure to meet these deadlines can constitute a breach of contract, and the breaching party can become legally liable to the non-breaching party.
The nature of performance is also important; these contract obligations must be performed precisely as specified. Any deviation from the agreed-upon terms can lead to allegations of breach.
Liability for Default
The “breaching” party may have liability to the non-breaching party under the terms of your agreement. Typically, the agreement should identify what type of litigation or claims are allowed when a default occurs. This can include claims for specific performance (a court order to force the breaching party to do something), monetary damages, termination of the contract, or other legal or equitable claims depending on the facts and circumstances.
When Litigation Becomes Necessary
The parties may not be able to resolve the breach of contract outside of court. If no closing occurs and no agreement can be reached, litigation becomes a likely next step. Breach of contract litigation can include the filing of complaints, written objections and responses, discovery, pretrial motions and hearings, trials, and appeals.
Trusted Breach of Contract Lawyers
Breach of contract claims can be complex and have significant financial and legal implications. Seek help from Avenue Legal Group, who have the experience you need in real estate contract disputes and breach of contract claims.
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