RE05RC01: Contract Law

by | Dec 1, 2012 | Closing Attorney


— Real estate closing attorney in Massachusetts guiding those buying a house or selling their home. Our lawyers answer questions on : purchase sale agreement, closing costs, title company, title insurance, refinance mortgage, estate planning, probate court and commercial real estate, as we serve all of Greater Boston, Massachusetts including the South Shore, Metrowest and elsewhere in Eastern Mass.

RE05RC01: Contract Law

  1. History of Contract Law
  2. What is a contract?
    1.   1.        voluntary agreement or promise
    2.   2.        Parties to the Contract
    3.   3.        Requirement of competency of parties
    4.   4.        Must be for legal purposes
    5.   5.        consideration
  3. Types of Contracts
    1.   1.        Express – the parties state their terms and show their intentions in words.
      1.          a.        written
      2.          b.        oral
    2.   2.        Implied – the agreement of the parties is demonstrated by their:
      1.          a.        acts
      2.          b.        conduct.
  4. Classification of Contracts
    1.   1.        Bilateral
    2.   2.        Unilateral
    3.   3.        Executed
    4.   4.        Executory
  5. Elements of a Contract
    1.   1.        A competent party
    2.   2.        Offer
    3.   3.        Acceptance
    4.   4.        Consideration
    5.   5.        Legal object
    6.   6.        Consent
  6. Minimal Requirements of a contract

For a contract to be valid and enforceable under the Massachusetts Statute of Frauds, you must have a written memorandum with following minimal requirements:

  1.   1.        A writing
  2.   2.        Must identify the parties
  3.   3.        Accurate description of property
  4.   4.        Recital of consideration
  5.   5.        Must be signed by the party to be charged
  6.   6.        Basis for rescission
    1.           i.        misrepresentation
    2.          ii.        fraud
    3.         iii.        undo influence or duress
  7. Validity of Contracts
    1.   1.        valid
    2.   2.        void
    3.   3.        voidable
    4.   4.        unenforceable
  8. Types of real estate contracts
    1.   1.        Listing Contracts

.        Exclusive right to sell

  1.          a.        Exclusive agency
  2.          b.        Open listing
  3.          c.        Net Listing (illegal)
  4.   2.        Buyer Representation Contract

.        Exclusive buyer agency agreement

  1.          a.        Exclusive agency buyer agency agreement
  2.          b.        Open buyer agency agreement.
  3.   3.        Offer to Purchase

.        Key Terms:

  1.                 a.        Parties
  2.                 b.        Dates
  3.                 c.        Legal description of property
  4.                 d.        Contingencies
  5.                 e.        Price
  6.                  f.        Earnest money
  7.                 g.        Terms
  8.                 h.        “Time is of the Essence”
  9.          A.        Types of Offers
    1.                 a.        Counter
    2.                 b.        Back-up
    3.                 c.        Multiple offers
    4.                 d.        Letter of Intent
    5.                 e.        Options
    6.   4.        Purchase & Sale Agreement (more detailed contract)

.        Parties (identification of buyers and seller)

  1.          a.        Description of property
  2.          b.        Consideration
  3.          c.        Time for performance and possession
  4.          d.        Title Deed
  5.          e.        Adjustment (proration of taxes, utilities, fuel, insurance etc.)
  6.           f.        Casualty loss
  7.          g.        Default provisions
    1. Opportunityfor cure
    2. Liquidated damages
    3.          h.        Contingencies clauses
    4.           i.        Construction of agreement
    5.           j.        Dates and signatures
  8. Termination
    1. Performance of the contract.
    2. Expiration of the time for performance.
    3. Partial performance with written acceptance by other party.
    4. Substantial performance.
    5. Impossibility of performance.
    6. Rescission
      1.          0.        By mutual agreement
      2.          1.        Unilateral.
    7. Operation of law.
    8. Breach of contract.
  9. Remedies for Breach

.      At Equity

  1.          0.        specific performance
  2.          1.        injunction
  3.          2.        rescission
  4.          3.        lis pendens
  5.          4.        vendor/vendees lien
  6. At Law
    1.          0.        1) monetary damages

.      expectation

  1. benefit of the bargain
  2. lost opportunity/profit
  3. damages/losses suffered
  4. replacement

Instructor Notes:

Instructors are responsible for maintaining their own curriculum to keep abreast of changes in the law. Instructors are encouraged to “teach” to the class and treat this as a basic introduction or advanced course. Instructors may wish to use sample form contracts, articles or other copyrighted material as handouts. Instructors are responsible for seeking copyright permission prior to using any copyrighted materials.

Authority

  • M.G.L. c. 251 Section 1, et al. Statute of Frauds
  • M.G. L. c. 183, Section 1, et al, Deeds and Conveyancing

Important Cases for Discussion:

  • Tristram’s Landing Inc. v. Waite, 367Mass. 622 (1975)
  • Underwood v. Risman 414Mass. 96 (1993)
  • Urman v. South Boston Savings Bank 424Mass. 165 (1997)
  • Kelly v. Marx 428Mass. 877 (1999)
  • McCarthy v. Tobin, 429Mass. 84 (1999)

Secondary Sources

The Real Estate Desk Book, A Broker’s Guide to Consumer Protection, Procuring Cause and Commissions, Philip S. Lapatin, Esq., GreaterBoston Real Estate Board, 1999

The Standard Forms Guide, Philip S. Lapatin, Esq., GreaterBoston Real Estate Board, 1991

 

 


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