Signed Contracts and validity

[TMNT]

can anybody please brief me on a few legal questions I have, these have all happened to me in the past 6 months

1. in a nutshell, agent said, the first offer at this price will get it, they sent me a signed contract by the vendor that had their signature, date and price on it, I signed it, returned it to the agent, started the paperwork, 24 hours later got told that someone else had beaten me by a few hours, but I also have a signed contract in my possession!!

2. we agree on a settlement date, on the contract they put the wrong date (accidentally, off by 1 week) , they sign it and give it to me, as per the agents advice, I change the date and initial it, sign it and send it back, all is good, but if Im allowed to change dates, whats stopping dodgy people from changing price etc.

3. we agree on price, terms, conditions etc. etc. etc. etc.
on the contract it simply says 10% deposit, no time frame, I sent a cheue for the deposit, cheque was cashed, funds withdrawn, but didnt show into the trust account for close to 10 days (i was told because the account was a smaller credit union), and the vendors started getting a bit nasty. Can I lose a sale or even my deposit for something thats beyond my control

 

[Terry_w]

can anybody please brief me on a few legal questions I have, these have all happened to me in the past 6 months

1. in a nutshell, agent said, the first offer at this price will get it, they sent me a signed contract by the vendor that had their signature, date and price on it, I signed it, returned it to the agent, started the paperwork, 24 hours later got told that someone else had beaten me by a few hours, but I also have a signed contract in my possession!!

2. we agree on a settlement date, on the contract they put the wrong date (accidentally, off by 1 week) , they sign it and give it to me, as per the agents advice, I change the date and initial it, sign it and send it back, all is good, but if Im allowed to change dates, whats stopping dodgy people from changing price etc.

3. we agree on price, terms, conditions etc. etc. etc. etc.
on the contract it simply says 10% deposit, no time frame, I sent a cheue for the deposit, cheque was cashed, funds withdrawn, but didnt show into the trust account for close to 10 days (i was told because the account was a smaller credit union), and the vendors started getting a bit nasty. Can I lose a sale or even my deposit for something thats beyond my control

Seek specific legal advice, but generally a contract for land is not enforceable unless it is in writing. You have their signed contract - this is basically an offer to sell until you accept it. If they withdrew their offer before you signed it then it may not be valid, but if you accepted their offer then there may be a binding contract.

 

[TMNT]

Seek specific legal advice, but generally a contract for land is not enforceable unless it is in writing. You have their signed contract - this is basically an offer to sell until you accept it. If they withdrew their offer before you signed it then it may not be valid, but if you accepted their offer then there may be a binding contract.

ok, in this instance, the date, price, and their details were all filled out, and sure it is an offer to treat. which is fine, however, once I sign, isnt it a valid contract since I have accepted it>?????

obviously they have to notify me in writing or orally at least if they want to withdraw and sell it to someone else, unless this was the case, then whats the point of a contract if you can make excuses

when I was selling my business, i had found a buyer and we signed contracts, but I got a far higher offer straight away and I did investigate through a lawyer what my options were and was told "if you sell it to someone else, they can sue you"

in this instance, I had a signed contract from them, and I did sign it and fwd it to my broker, and solicitor, so logically it must be a valid one!

 

[Terry_w]

yes, you probably have a binding contract. The fact that they have binding contracts with several purchasers is their problem.

 

[TMNT]

ahh got it, looks like I was legally correct, but enforcement is another question

 

[thatbum]

ahh got it, looks like I was legally correct, but enforcement is another question

Except putting in those changes to the contract and initialising changes makes it a lot less clear about whether the contract is binding.

 

[RPI]

They can also withdraw their offer after you have signed but before you communicate your acceptance of that offer.

 

[Paul@PFI]

Was a deposit paid and accepted ?? No... No contract.

Remember that the real estate guy is an "agent"...An agent of the vendor. The vendor didnt accept your contract. He is also a party to the contract being made. He can accept a deposit but a deposit isnt a contract. He can accept a signed contract but its not binding under contract law without consideration. Then there may be cooling off periods etc too.

A contract must also have consideration. None was paid and accepted. All the conractual elements must be in place for a binding contract.

Its like Woolworths - They can advertise a product but you cant force them to sell it to you. Its merely an invitaton to treat. They can withdraw it, be out of stock, refuse you service (ie like a bar) etc. If you want to pay in 5 cent pieces over the legal tender theshold they can refuse etc.

 

[wylie]

Was a deposit paid and accepted ?? No... No contract.

Remember that the real estate guy is an "agent"...An agent of the vendor. The vendor didnt accept your contract. He is also a party to the contract being made. He can accept a deposit but a deposit isnt a contract. He can accept a signed contract but its not binding under contract law without consideration. Then there may be cooling off periods etc too.

A contract must also have consideration. None was paid and accepted. All the conractual elements must be in place for a binding contract.

This is not the advice we were given when the purchaser changed his mind after signing a cash, unconditional contract and having his solicitor advise him and sign off that he had waived his cooling off.

However, he decided not to transfer the deposit on the day the contracts were signed, and wouldn't answer calls or texts from our agent the next day (Friday). Saturday, he sent her a text saying he had changed his mind, had not paid a deposit and there the contract was not valid. Legal advice we got was that he was quite wrong.

Luckily for us, his lawyer told him first thing the next working day (after we had a sleepless weekend) that he was committed to the purchase. I know he could have stood up to us and forced us to force him to settle. That still could happen I know, as it is not yet settled. But a least now we have a healthy chunk of his cash sitting in a trust account.

 

[TMNT]

Was a deposit paid and accepted ?? No... No contract.

Remember that the real estate guy is an "agent"...An agent of the vendor. The vendor didnt accept your contract. He is also a party to the contract being made. He can accept a deposit but a deposit isnt a contract. He can accept a signed contract but its not binding under contract law without consideration. Then there may be cooling off periods etc too.

A contract must also have consideration. None was paid and accepted. All the conractual elements must be in place for a binding contract.

Its like Woolworths - They can advertise a product but you cant force them to sell it to you. Its merely an invitaton to treat. They can withdraw it, be out of stock, refuse you service (ie like a bar) etc. If you want to pay in 5 cent pieces over the legal tender theshold they can refuse etc.

no deposit was paid in this instance as I found out about the other offer being accepted when I asked for the bank account details,

so what would have happened if I posted a cheque out?????? at which point does the depoist become a deposit, once they receive the cheque? once its cahsed? or once its cleared????

lets take your woolworths one as an example for comparison, what about a mobile phone contract, you sign and you but you dont pay a cent???? ok so you get a phone, is that consideration? what about a 12-24 month sim card only phone? you dont receive a phone, and the sim card might take a while to come,

 

[Terry_w]

Was a deposit paid and accepted ?? No... No contract.

Remember that the real estate guy is an "agent"...An agent of the vendor. The vendor didnt accept your contract. He is also a party to the contract being made. He can accept a deposit but a deposit isnt a contract. He can accept a signed contract but its not binding under contract law without consideration. Then there may be cooling off periods etc too.

A contract must also have consideration. None was paid and accepted. All the conractual elements must be in place for a binding contract.

Its like Woolworths - They can advertise a product but you cant force them to sell it to you. Its merely an invitaton to treat. They can withdraw it, be out of stock, refuse you service (ie like a bar) etc. If you want to pay in 5 cent pieces over the legal tender theshold they can refuse etc.

I disagree with this Paul.

A contract doesn't need a deposit to be valid. Consideration doesn't mean deposit, but something of some worth being paid in exchange for something. Consideration would be the purchase price. And just because the deposit hasn't been paid yet, doesn't mean the contract is is invalid.

 

[TMNT]

I disagree with this Paul.

A contract doesn't need a deposit to be valid. Consideration doesn't mean deposit, but something of some worth being paid in exchange for something. Consideration would be the purchase price. And just because the deposit hasn't been paid yet, doesn't mean the contract is is invalid.

im no lawyer but I agree with terry,

so if I win an auction, and pay the deposit the following monday (which ive done many a time), im pretty sure the agent cannot sell it to somebody else since I havent paid the deposit

 

[wylie]

im no lawyer but I agree with terry,

so if I win an auction, and pay the deposit the following monday (which ive done many a time), im pretty sure the agent cannot sell it to somebody else since I havent paid the deposit

Our legal advice was that we "could" have gotten out of the contract in the case I've detailed above. In fact, we had an appointment with our lawyer midday Monday. Over the weekend, thinking our buyer was going to crash our contract, even having been advised we could sue him to settle or sue him for any loss we suffered if the next contract was less than his, we instead had our agent find us a back up contract.

We had other buyers ready to sign at the same figure, but they wanted building/pest conditions. I would have sold to them gladly over the vendor who had stuffed us about, but half an hour before our appointment with our lawyer where we planned to back out of the contract due to the purchaser having not fulfilled their obligation to pay the deposit as outlined in the contract, we got word that his lawyer told him he must proceed.

So, from the advice we had (Queensland), we could have rescinded the contact due to his not fulfilling his promise to pay the deposit by 5pm the day after signing the contract.

If the other buyer had been able to go cash unconditional, we would have done that, even after his advice that he wanted to proceed.

 

[TMNT]

interesting, well done on your sale!! good to hear justice was served

 

[Terry_w]

There will probably be additional terms in the contract itself which may state a seller is able to rescind the contract if the purhcaser has not paid a deposit within x days.

 

[Paul@PFI]

im no lawyer but I agree with terry,

so if I win an auction, and pay the deposit the following monday (which ive done many a time), im pretty sure the agent cannot sell it to somebody else since I havent paid the deposit

Precisely !!! LOL - Contract law cant be condensed to a SMS. Two signed contract forms doesnt make a contract.

Contracts are all formed differently. Offer, acceptance, consideration , capacity, intent, formalities, certainty, legislation etc etc......All the elements must exist.

Why do we have "exchange" ?? Its when many (not all) contracts are considered binding and irrevokable. Auction contracts are on fall of hammer usually. etc. Now imagine if the buyer is a bankrupt you cant enforce that.

 

[Paul@PFI]

no deposit was paid in this instance as I found out about the other offer being accepted when I asked for the bank account details,

so what would have happened if I posted a cheque out?????? at which point does the depoist become a deposit, once they receive the cheque? once its cahsed? or once its cleared????

lets take your woolworths one as an example for comparison, what about a mobile phone contract, you sign and you but you dont pay a cent???? ok so you get a phone, is that consideration? what about a 12-24 month sim card only phone? you dont receive a phone, and the sim card might take a while to come,

Whaaa...?? Nucking futz...There is also a cooling off right. And Telecommunications and consumer law. Its a claytons contract?

 

[Paul@PFI]

I disagree with this Paul.

A contract doesn't need a deposit to be valid. Consideration doesn't mean deposit, but something of some worth being paid in exchange for something. Consideration would be the purchase price. And just because the deposit hasn't been paid yet, doesn't mean the contract is is invalid.

So two signatures alone = a contract. Imagine if the agent gave out ten copies all signed. Everyone can enforce it ?? What are the elements that lead to a binding contract is what I referred to. Signatures are one element. ...Other things make a contract. Gazumping wouldnt happen if a contract only required just two signatures. Most contracts refer to a deposit. Often 10% and can be varied by agreement. So thats a essential element.

Its why vendors all sweat it out until its unconditional. Cooling off, subject to....exchange, etc etc. Deposits can be part of it.