Contracts: Part II
Now that you are familiar with the elements of a contract, let’s take a some time to learn about some contracts that exist in the real world that you see on a regular basis. Your home. If you are an owner, there were several contracts that we created during the purchase. The first is the contract you had with your attorney. Chances are, you paid a fee and signed a “contract for services.” which included disclaimers and laid out the relationship you had with your attorney, including what services the attorney will and will not perform.
Then there is a contract you may have signed with your Realtor and, chances are, you promised not to use anyone else. That is more common with the seller but the buyer often has to sign that as well. Then, there is a contract with the bank. All of your mortgage documents make up a contract where you are promising to pay back the loan. Then of course, there is a contract with the seller where you are “accepting” their “offer” for the sale of their home, or vice versa. You see all of the elements there on that contract. They put an ad in the paper, or hired a Realtor to market their home for them. Normally, when you see an add in the paper, with the price, that is not an “offer” as defined by the Uniform Commercial Code. An ad in the paper, for the sale of a house, or anything else, is actually a request or invitation for you to give them an offer. Then, you reply to the ad, make an offer, and they have the opportunity to accept that offer. If they do accept, you are bound by the new contract, subject to contingencies. If they come back with a counter offer, now they are the offeror and you have the opportunity to accept. And, back and forth it goes.
If you do not own your home, you are in a rental contract. Many contracts, including the contract for sale of a residence, and a rental contract, have an entire set of laws that govern that relationship, because housing is such an important part of our lives. Other contracts, like an oral contract for services, will not be governed by anything other than the terms that you agree to.
Business contracts are created every day. We will discuss common business contracts next week. What was the last contract you entered into?
Brian Fons, Corporate Creations. Brian.Fons@corpcreations.com or check out my Podcast in iTunes.