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BUSINESS
LITIGATION PRIMER |
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Real Estate ·
Sales
Contracts ·
Agents
and Brokers ·
Deeds ·
Property
Security Interests ·
Forcible
Detainer ·
Eviction A contract for the sale of real estate is an agreement
that binds the purchaser to buy and the seller to sell the subject property
in accordance with the terms of the contract. The formation of the contract
passes equitable title to the purchaser. This type of contract gives each
party the right to specific performance to effect a conveyance of the
property. In a contract for sale, time is not generally of the essence. Although a sale and an exchange of property are
technically different, a ``sale'' in its broadest sense includes any transfer
of property from one person to another for a valuable consideration. A valid
contract for sale is distinguished from an offer to sell in that the former
is a binding obligation on all parties. Similarly, it differs from an option
to purchase property because it binds both parties, i.e., one party is
obligated to sell and the other party is obligated to buy. The management of
litigation involving a real estate contract frequently depends on whether the
contract is one for the sale of real estate or another type of contract
granting one party a right to acquire real estate, such as an option contract
or an executory contract or contract for deed. Typically, a contract for sale is designed to bind the
parties until closing, i.e., consummation of the contract by delivery of the
deed and related documents. Usually, this intervening period is short. It is
intended to allow the parties time to arrange financing and investigate
title. |
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