Our next stop is a lease. A lease is a contract that allows someone to own and use real estate for a period of time. Although we are most familiar with rentals, a lease can apply to any property – a house, a condo, even a vacant lot. As a sales contract, a lease agreement must identify the leased property. However, since a lease is only a temporary transfer of ownership, the description of the property is often less formal. A postal address may be sufficient for a rental contract, but it is not enough for a sales contract. In recognition of this difficulty, government and federal laws have established special independent rules for real estate agents. For example, the IRS considers a real estate agent to be a “legal non-employee” when (1) the broker is authorized, (2) the broker`s fees are based on sales and not hours worked, and (3) the broker works under a written agreement stipulating that the broker is not treated as an employee for federal tax purposes. State law may provide for additional requirements, but an independent contractor contract allows everyone – the agent, the broker and the public and federal tax authorities – to know how to manage the agent`s taxes and payments.
What do you receive if you mix the offer and acceptance, the consideration, two parties with the legal contractual capacity and a legal purpose? You will receive a legally enforceable contract that binds the parties. What`s going to happen? Let`s take a look at the types of contracts you`re probably dealing with as a real estate agent. As you will see, most real estate contracts involve a person who gives money to another person in exchange for a transfer of some interest in real estate, from a simple option to the full purchase. But suppose Leopold had said, “Of course, Suzy. I like what you were doing here. It`s a nice deal. You have a deal. I`ll pay you $280, 000 and we`ll close on May 14th. Do Suzy and Leopold have a contract? Discharge by agreement before execution is the easy case. But what if one of the parties has already started providing its services? This situation is more difficult because only an exit from the contract after the start of the performance would unjustly enrich or harm one of the parties.
Imagine, for example, that Ernesto, instead of selling a theatre to Maya, built a theatre for them. If Ernesto had finished half the building and Ernesto and Maya wanted to break the agreement, Maya would have half a building and Ernesto nothing. In this case, Ernesto and the courts would expect Maya to pay Ernesto something before abandoning the contract. The fact that Maya`s “something” would pay would be the new consideration for Ernesto not to complain about the original contract and ask the court to pay him damages. First, Tanya and Terry have a duty to respect their contractual obligations. Terry promised to seek financing so he could pay Tanya $200,000. Tanya promised to replace the dilapidated oven.