1. Real Estate Contracts

2. Contract Law A contract must be: Contracts may be express or implied
voluntary
an agreement or a promise
made by legally competent parties
supported by legal consideration
about a legal act
Contracts may be express or implied
Express simply means that the parties state the terms and show their intentions in writing.

3. In Alabama all contracts concerning real estate must be in writing.
A good example of an implied contract is what happens when you go into a restaurant and order a meal.
Unilateral vs. bilateral contracts.
Executed vs. executory contracts.

4. Essential Elements of a Valid Contract
Offer and acceptance – there must be a meeting of the minds (mutual assent)
What happens when there is a counter-offer?
An offeror may revoke the offer at any time before receiving the acceptance!
Consideration – something of legal value.
There must be a definite statement of consideration in a contract.

5. Legally competent parties
Reality of consent
A mistake, misrepresentation, fraud, undue influence, or duress would result in a contract that is voidable.
Legal purpose
Legally competent parties

6. Validity of Contracts
A contract can be valid, void (has no legal force), or voidable.
Unenforceable
Doesn’t mean that both parties could not go ahead and fulfill the contract.

7. Discharge of Contracts
Performance
Assignment
Novation
Breach of contract
One remedy is a suit for specific performance
Other reasons for termination:
Partial performance, substantial performance, impossibility of performance, mutual agreement, operation of law, recission.

8. Contracts Used in Real Estate
Listing agreements
Real estate sales contracts
Options
Land contracts or contracts for deed
Leases and escrow agreements
If a contract contains any ambiguity, the courts generally interpret the agreement against the party who prepared it.

9. Review of Real Estate Forms