Contract Law- Fact Scenario

Exists a written agreement between the parties? Describe in detail the relevant legal principles, how you came to that conclusion, the parties to the contract, and its conditions if there is/are a contract(s).

A contract is described as a series of legally enforceable assurances between two parties, whose execution procedure and other problems are resolved by the legal system. A contract must include an offer and acceptance in Utah along with terms, conditions, and formal procedures that are agreed upon by all parties. (Kaplan and Dearborn, pg. 41). In the case study presented, there exists no contract between any of the parties involved. Several factors

exist to eliminate each negotiations owing to the guidelines concerning such processes outlined in the Utah State law. In each scenario, the actions of the parties involved and their nature of interactions invalidate their negotiations.

Jon signed his name on the REPC as the buyer and provided details concerning the time of acceptance. According to Utah laws, the acceptable age for an entrant in a contract is 18 years with exception of marriage (Kaplan and Dearborn, pg. 41). Jon was 17 years old at the time of contract negotiation. Additionally, he and Marsha were not legally married which eliminates his eligibility to participate in contract deliberations. Though the seller had already accepted the offer and mailed the acceptance before the deadline designated in the buyer’s Addendum 2. Under the law of Utah, the agreement can be considered inadmissible if the seller decided against selling the property to this specific buyer.

In the case of the seller and the second buyer, there are no legal documents that have been signed and hence there is no contract. An oral offer is made by the buyer and the seller accepts and unofficially promises to sign the REPC as soon as it is mailed. This unofficial communication does not even qualify as a verbal contract. There are no legally binding documents signed hence this situation contradicts the mere definition of a contract provided by Kaplan and Dearborn (pg. 41). Since oral promises are not legally binding in the State of Utah, the seller can back out of the deal at any point without causing a breach of contract.

There were several purportedly contractual negotiations or transitions in the case description. If you decided that some of those transactions do not qualify as a contract, detail and describe why.

Marsha and the seller’s broker negotiate new terms of the contract and reach a consensus. However, their phone conversation does not constitute the acceptable methods of legal deliberations. Without informing the seller, the broker accepts Marsha’s offer unofficially over the phone. As disclosed in the Utah law, a contact can be considered void if one of the parties fails to disclose important information (Kaplan and Dearborn, pg. 42). In this scenario, the broker accepted the offer made by Marsha without informing the seller. Marsha also failed to inform Jon who was the buyer in the case scenario. Hence this agreement is considered informal and does not carry any weight in the process of contract concession.

After mailing the acceptance, the seller had a change of heart and called to cancel the acceptance. This alteration cannot be termed as a contract for several reasons. One of them is the fact that the seller made the call 30 minutes after the response deadline provided for the buyer’s addendum. Also, the seller only left a message for the buyer which means that there was no direct negotiation involved between the two parties since communication was one-sided. Friedman and Linderman (Pg. 126) elaborate on this notion citing that once an offer is accepted, it is too late to amend any of the terms of the agreement. The seller could approach the buyer and request for an amendment of the terms but the buyer is not obliged to agree since the terms of the contact have already been determined.

Negotiations between the seller and the second byer do not qualify as a contract. Jennings (pg 367) establishes that the process of contract formation starts with the buyer presenting an offer to the seller. A formal document containing the offer and the buyer’s signatures and financial information is sent to the seller. In this way, the buyer formally communicates their intention of acquiring the property in question. After that the seller can either accept the offer or present a counter offer with different terms. At this point, the negotiations concerning the property sale have officially kicked off.

3. Identify any defences to enforcement that any of the parties may have and against whom they would be asserted, and whether those defences would be successful and why.

There are several defences that could be raised by each party in order to assert claim to try and persuade the arbitrators on their position concerning the case. For instance, the buyer can claim lack of capacity to contract (Rogerson, pg 234) due to the fact that he was legally a minor when signing the contract. This defence invalidates all the actions of the buyer during the process of contract negotiation. It is also used in instances when the buyer’s state of mind is questionable and therefore the whole process is tarnished.

Another defence asserted against the seller would be frustration of purpose arising from the fact that UB flash announced that it was building in the vicinity of the seller’s property. Impossibility in this case arises when the seller is unable to perform the terms stated in a contract due to the occurrence of unforeseen events (Rogerson, pg 234). Since the company aimed at acquiring the property in the surrounding area, the seller felt it was best to nullify the agreement with the previous buyer in light of better prospects offered by UB Flash.

Fraud is the most common aspect included in the defence to enforcement. Rogerson (pg 235) elaborates that the enforcement of this defence is usually carried out without the supervision of the judicial courts. However for this case scenario, it is difficult to pinpoint the underlying issues that may have contributed to fraudulent activity by the real estate agents. Other defences that may be asserted to the brokers include recognition and enforcement of judgement. These defences are aimed at highlighting the lapse in judgement conveyed by the agents on several occasions which aggravated the legal misgivings of the case in its development.

Also, the agents used undue influence Rogerson (pg 235) to mediate the process because they had great control over the flow of information between the seller and the buyers. Because they had all the information concerning the terms presented by the buyers and the sellers, the agents saw it fit to make decisions that were not theirs to make in the first place. This defence is mostly used for people who manipulate their interest by virtue of the position which they hold in an argument (Rogerson, pg 235). It does not however address the incompetency of the brokers and some of their actions like the delayed conveying of crucial information.

4. Identify the available remedies that any party could request of a court, and whether a court is able or likely to provide that remedy and why.

There are several remedies that a buyer can request if the seller backs out or fails to perform their obligations during the transaction. The buyer could request the court to terminate the negotiations and force the seller to refund the buyer’s deposit (Miller, pg 218). However for this case, there is a discrepancy between the theoretic and actual events. For instance, the REPC states that a deposit of $5000 was made by the buyer. However, in reality, the broker only checked the box but did not receive the cheque because Marsha claimed she did not have her cheque book in possession at the time.

Due to the fact that there was no legal contract between any of the parties in this case, the court can apply the principle of quasi contract. A quasi contract is used in situations where negotiations were conducted despite the inexistence of a lawfully acceptable contract agreement (Miller, 218). It is granted when one party partially fulfils its obligations in a transaction and hence deserves to receive compensation for damages and accrued expenses. In deliberating the amount of compensation the buyer must consider judicious expenses such as the cost of title inspection and hiring a broker. Remedies provided by the court depend on whether the seller, by breaching the terms of the agreement, acted in good faith or not.

5. Describe how the concept of agency effected the parties’ legal positions in the case study. Did the agents help or harm their clients? Why?

Two aspects of agency are portrayed in the case: the first one is the relationship between the broker and the seller in which the broker is tasked with finding a willing buyer. The second aspect encompasses the relationship between the broker and the buyer which encompasses provision of legal information concerning the contract (Lank, pg 26). It is the fiduciary role of the broker to disclose all the information concerning the contract to the parties involved (Persadie and Ramlogan, pg 411). In addition to this, the agent must also diligently obey the directives of the client and leave all the decision-making to them.

First, the agent failed to disclose to Jon that he could not participate in the process of contract negotiation for legal reasons. The seller’s broker was irresponsible and forget to give Jon’s acceptance to the seller. He again failed to inform the seller of the proposal made by Marsha and instead went ahead and accepted the offer. Such breach of duties warrants penalties such as loss of commission, loss of licence or in some cases the broker may be charged with civil offense (Lank, pg 31). Actions of the agent affect the legal position of all parties in this case because they provide the integral link in communication between the two parties.

Real estate Agents are supposed to simplify the process of purchasing and selling property. In theory, they act as the connectors who establish a link between the seller and the buyer (Lank, pg 26). However, the agents in this case brought about more harm than good to their clients due to their negligence and disregard for responsibility. Instead of pushing the buyers into contact agreement, the broker should have advised Jon and Marsha to seek legal advice concerning property ownership. The agent also falsified information on the REPC claiming to have received the deposit from Marsha.

Such incompetency may prescribe dire legal consequences for the clients because the seller may sue the byer and the broker for falsifying information on a legal document. Real estate agents ought to always act within the provisions of the law concerning such transactions (Lank, pg 32). However the two agents in this case are very unethical and therefore manage to manipulate the gullible buyers and seller. Poor communication methods and lack of consensus can be attributed to the brokers who withhold information. It is clear that the seller’s broker does not prioritize the needs of his client because he even forgets to deliver important documents in time. His action affect the decision of the seller who cannot effectively deliberate efficiently due to limited time.

6. If you were the judge on this case and all the parties named in the case description were party to the lawsuit, how would you resolve the case and why? Who would end up with the property and on what terms? Who would get nothing and why?

From a legal viewpoint, the property in question is still under the possession of the seller. According to Slossberg (176) the title deed is recognized as the only document that indicates legal ownership of a certain piece of property. Hence for this case, the property still remains under the sellers name while other parties may get compensation depending on the extent of challenges faced during the development of the case. As a judge I would dismiss the case filed by Jon on grounds of the fact that he is legally he is still a minor. Though I will consider the grievances presented by the plaintiff if he was not aware of this legal requirement when signing the contract. I also would consider the implications and the psychological stress that the couple faced during the process of negotiations.

Evaluation of the document clearly shows that an offer to purchase had been made by the buyer and accepted by the seller in accordance with the regulations of the buyer’s addendum. I would therefore order the seller to compensate the buyer because breach of contract after acceptance attracts liability for any damages that the buyers might have amassed due to reliance on the contract (Jennings pg 368). Moreover the seller proceeded to accept another offer made by a second client which shows that the breach of contract was not in good faith. Hence I would demand that the seller also compensate the second buyer only if this particular buyer can prove that their intent to purchase. However, the property rights still remain under the possession of the seller at the end of the case.

Due to the several misdemeanours exhibited by the real estate agents involved in this case, I would demand that their licences be revoked. Furthermore, they would be required to present the satisfactory review of the licencing boards after successfully attending programs on work ethics in property management. In addition, they will not receive commission for the sale of this property because of their contribution to the conflict presented in this case. The money from their commission would be redirected to cover the compensation for the buyer and the seller (Persadie and Ramlogan, pg 411). Also, the real estate agents would not be allowed to conduct their business activities in Utah for a certain period of time.

My judgement to the brokers would be the most severe because they made several grave errors which essentially propagated the whole situation. I would also demand that each of the parties involved attend workshops and seminars dealing with real estate purchase procedure. For Jon and Marsha, I would recommend that the couple seek legal advice and clarification on issues pertaining to real estate investment. Issues such as ignorance and failure to recognize details can cause conflict during the process of acquiring property. Therefore, anyone seeking to acquire property must first familiarise themselves with the laws and policy regulations of the industry. This can prevent cases of loss of revenue or repossession of property as a result of breaking the law. Buyers and sellers must be wary of sleazy real estate agents who are untrustworthy and conduct such proceedings in an unethical manner.

References

Friedman, Jack and Linderman, John. Barron’s Real Estate Licencing Exams: Salesperson, Broker, Appraiser. Revised Edition. Barron’s Educational Series. 2010.

Jennings, Marianne. Real Estate Law. 8th Edition. Cengage Learning. 2007.

Kaplan Publishing and Dearborn Financial Publishing. Utah Real Estate Basics. Dearborn Real Estate. 2003.

Lank, Edith. Modern Real Estate Practice in New York: For Salespersons and Brokers. Illustrated Edition. Dearborn Real Estate. 2003.

Miller, Roger. Cengage Advantage Books: Fundamentals of Business Law: Summarised Cases. 9th Edition. Cengage Learning. 2012.

Persadie, Natalie and Ramlogan, Rajendra. Commonwealth Caribbean Business Law. Revised Edition. Routledge. 2015.

Rogerson, Pippa. Coller’s Conflict of Laws. Illustrated Edition. Cambridge University Press. 2013.

Slossberg, Lynn. The Essentials of Real Estate Law. 3rd Edition. Cengage Learning. 2014.