Verbal contract/agreement, is there such ?

[v770]

Just a quick question, is there such thing as Verbal agreement?
as in, if a vendor agrees to sell me his unit at xx amount, (we both havent signed the contract of sale yet), and someone pops up in the picture and decided to offer xx amount more than my offer, can the vendor change his mind and sell it to the other person even if he agreed to sell it to me first with the amount i offered?

Is there any sort of breach of contract? (verbally)

 

[alexlee]

Just a quick question, is there such thing as Verbal agreement?
as in, if a vendor agrees to sell me his unit at xx amount, (we both havent signed the contract of sale yet), and someone pops up in the picture and decided to offer xx amount more than my offer, can the vendor change his mind and sell it to the other person even if he agreed to sell it to me first with the amount i offered?

Is there any sort of breach of contract? (verbally)

Short answer, no. Nothing is final until BOTH parties (so a contract just signed by you means nothing) sign the contract AND all terms and conditions are satisfied.

With just a verbal agreement, the vendor can do whatever they want (as can you). They can sell it to someone else for LESS than you offered, if they want. Without a contract signed by both parties, both parties can do whatever they want. This applies to you too, of course.
Alex

 

[Meisterin]

In NSW any real estate transaction must be in "deed", ie in writing to be binding.

The "verbal contract" you are talking about is over-ridden by statute in relation to real estate. I think s23B of Conveyancing Act or Real Property Act....

 

[mitch]

Trying to keep it simple and accurate.

Yes you would have a verbal contract , but it would be unenforcable.

The contract of sale ( of real estate ) - which results from a written offer from a prospective purchaser that is accepted by the vendor and that , under section 126 of the Instruments Act 1958 , must be in writing .

Regards Mitch

 

[Noelc]

V770,

I was gazzumped two weeks ago on a PPOR, Wife was devastated.

After a number of weeks negotiating a price with the owner which he verbally agreed to another offer 20K higher than mine was submitted by another REA before the seller signed contracts. He had it listed with 3 REA and I knew that this other other was not a "Try me on" from the REA.

I refused to alter my offer but dangled an alternativne carrot and said that I,m happy to pay 15% deposit straight away which the owner can use immeadeatly and also complete a 66w certificate (Uncoditional contract) hand delivered to his conveyancer.

The purchaser agreed and contracts were exchanged less than 24 hours after that. Obviously you need to be very very very careful with a 66w certificate.

For me I was very comforatble with this as I knew the building was very good and finance was ok. All reports since confirmed this albeit a couple of restless sleeps.

So once settled my new PPOR is a 5 bedda on 929sqm no easements in a good area (Astoria estate, Baulkham Hills) obtained for 50K less than asking price and 20K less than what others were prepared to pay. ye ha

Some one on this forum said if its meant to be its meant to be.

 

[lizzie]

you got the house!!

yay - told ya that if it was meant to be ....

go noel!

 

[Kenster]

V770,

From the contract law point of view, for a contract to form, it must have the following three elements:

(1) Offer and Acceptance
- This is the agreement or consensus between two (or more) parties.
- Note that an offer is different to an Invitation to Treat, which is not an enforceable element of a contract

(2) Consideration
- This is the doing of an act by one party for the other. This is the price of securing the other party's adherence to the contract
- Consideration must move from the Promisee (ie. The buyer) but need not move from the Promisor (ie. The vendor)

(3) Intention to enter legal relations

From your brief description, it appears:

- The vendor had made an Invitation to Treat by announcing his intent to sell the property
- It is unclear if you made an Offer to purchase
- No indication if the vendor had Accepted the offer from you
- There is no indication if you had moved any Consideration to the vendor, such as a money deposit (or something else acceptable under the eye of the law)

Based on this simple assessment, the contract was not formed, therefore, no breach.

 

[mitch]

I believe there are six essential elements to the formation of a legally binding valid agreeement that must be present.

The other three are :Legal capacity

Legal capacity may be an issue for minors , people of unsound minds ( including drunks if they entered into a contract while intoxicated ) and bankrupts.

:Consent

Consent has two terms , Certanty of terms :terms are clear & unambiguos.
Genuine consent : unforced consent , no misapprehention of the terms of the contract.

:Legality

A contract cannot be enforced if it is illegal or operates outside the law.

You could then look at things regarding the statas of the contract , is it valid , void , voidable or unenforceable but then we could be here for years .

They didnt sign ( as required for a land sale ) so you dont have a valid enforceable contract .

Regards Mitch