Do you know how a contract works? Do you know when it binds versus when it can be voided? When can you legally walk away from a contract without penalty? These are all important aspects of contract law.
0:54 – What makes a contract? We’re using a lot of vocab today: void, voidable, executory, executed, duress, misrepresentation, etc. Is your agent qualified to represent you and your contracts?
1:30 – The basic elements of a contract: $500,000 for Jason’s blue house. The represents an offer of consideration (something of worth) in exchange for other consideration. Tyler’s $500,000 represents the buyer’s “valuable consideration” and Jason’s blue house represents the seller’s “valuable consideration”. When they agree to exchange, we have “acceptance.” Without consideration or acceptance, there is no contract. For everyone’s protection, it’s wise to have this agreement in writing.
2:38 – Both parties also need to be competent and have the capacity (informed authorization to transact). There needs to be no duress (coercion to accept and agreement someone wouldn’t otherwise accept, see 7:30). There also must be no misrepresentation (offering something as truth which later proves NOT to be the case, see 8:12). Finally, there must be no undue influence (when someone puts their finger on the scale and influences the transaction, see 9:30).
2:50 – Story time with Tyler. Here’s a commercial transaction that was presented for signature at a bar, after the one party had been drinking, and lacked the capacity to bind a contract. This results in a voidable contract – the presenting party is bound by the contract, but the individual without capacity is NOT bound to the terms…the contract is voidable at the option of the wronged party.
5:25 – The great thing about the Utah Real Estate Purchase Contract (REPC) is that it’s voidable, meaning people can back without penalty out for contingencies.
6:10 – Executory vs Executed. “Executed” means all terms of the contract are completed. This really only happens at closing. Most people mean “Executory”, meaning “signed by both parties”.
7:30 – Duress. “Sign this or else _” is a good indicator there’s duress. Interestingly, the person you presented the contract is bound by its terms, but the person under duress is NOT bound by its terms. The contract is thus, “voidable” by the person under duress.
8:12 – Misrepresentation. Something about the contract is not represented correctly. Even if a contract is executed, there is still legal remedy to be sought in court. The core of misrepresentation is knowingly deceiving someone.
9:30 – Undue Influence. Story time with Aric. What happens when relatives get involved? They’re not on title, but they exhibit influence over the transaction. Bringing a posse of people to review a home you’re considering purchasing creates influence over the purchasing decision. That can result in undue influence.
11:49 – What did we learn today?
13:33 – Bloopers.
* No undue influence misrepresented duress in this executed video.
Please contact us to tell us you love us, you want to hire us! Call or text:
Realtors with Hive Collective at Presidio Real Estate:
Tyler Cazier: 801-210-0230
Aric Wiszt: 801-228-7687
Lender with Elite Team at Security Home Mortgage:
NMLS: 178787
Jason Christiansen: 801-669-7271
NMLS: 240472
A Production with Security Home Mortgage’s Jason Christiansen, and Hive Collective at Presidio’s Tyler Cazier and “Mr. Suit” Aric Wiszt.