Reference no: EM133190285

Contracts (Valid Contract v. Real Estate Contract)

For a valid contract, in general, to exist there must be 3 elements present: 1) offer (by one party to another party; 2) acceptance (of the non-offering party); and 3) consideration (some time of monetary value or other type of value that will be exchanged for the inducement of the parties to contract). Conversely, a real estate contract requires at least 5 elements for a valid real estate contract to exist: 1) legal capacity of the parties; 2) mutual agreement; 3) consideration; 4) lawful purpose; and 5) written agreement. You should ensure that you understand the difference/nuance between a contract in general and a real estate contract.

In the case of a contract in general, all requirements must be present and there is no way to salvage the contract if all 3 requirements are not present. E.g. if there is an offer by Allen to contract to buy widgets from Barry for $30 and Barry decides that he will only sell his widgets if Allen pays $35, then there is no contract. Barry's response of $35 for sale of his widgets acts as a counteroffer in that scenario. However, if Allen agrees to pay the $35 and Barry accepts, then a new contract has been entered into between the parties.

Conversely, if all 5 requirements of a real estate contract are not present; the contract to purchase real estate is invalid and unenforceable. Discuss whether or not there is any way to salvage the real estate contract that does not have all 5 requirements present. You will need to go to your Chapter 6 to really get into a discussion and come up with the correct answer. I'm interested in your thought process so answering by a mere yes or no will not suffice. Good luck with the discussion.

My hope for you in this discussion is for you to give some examples of situations related to these questions and to discuss why each example fits into either category. Please have some of your personal opinions in this discussion as well.