Drafting Concise, Binding Contract Changes

Let’s say you have decided to buy a new home.  You have found one for sale that meets your basic needs and is in your price range.

You made a written offer to purchase the home and the seller accepted the offer as written. Congratulations – you have a contract!

The contract has several of the typical clauses covering things like (1) your down payment (aka “earnest money”); (2) having a third-party inspection, and (3) giving you 30 days in which to obtain a mortgage.

The inspection reveals that the house needs structural repairs that are substantially more extensive than you had noticed when you toured the house before offering to buy it.  You take a look at the Seller’s Property Condition Disclosure form, and it doesn’t describe anything approaching the level of repair that will be needed.

You consult with your real estate agent and your lawyer.  You still want the house, but you think the seller should pay to have the damage repaired prior to the closing date. The seller agrees!

What do you need to do now in order to still have an updated, legally binding contract?

  1. Write a contract amendment that has of all the elements required to make any contract binding: offer, acceptance, and consideration. (Consideration means something of value, such as land or money.)
  1. Get both parties to sign and date the amendment.

Note: contracts for an interest in land, such as for the purchase and sale of a home, are required to be in writing or they are unenforceable. The original contract and the amendment must both be in writing and signed.

What happens of you write up an amendment that lacks one of the required elements?

The amendment is unenforceable and the original contract language remains in full force. Both parties are required to perform their original, unmodified duties.

Michael Oswald

michael@msochartered.com

www.msochartered.com

Please note: the above post contains educational information. It is not intended as legal advice. Engage an attorney who is licensed in your state to get advice on dealing with any specific legal issue.

© 2018 Michael S. Oswald

 

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