I am hoping someone here can save me $150.00 by me not having to call my attorney to answer this question about Earnest Money.

WMH,

'Contract is dead',...does that mean the entire contract is now "null and void" and not worth the paper it was written on?

"It depends" is the correct answer.

Does the Contract provide anything about "time is of the essence"? Does the Contract say "every term is material"? Is a demand for performance required under state law?

What does the Buyer say about its default?

I would serve a demand for performance, or a notice that contract has been breached and is no longer enforceable by Buyer -- depending on the result I want. Or maybe even a demand that Buyer make the deposit of earnest money by April __, 2021 or the Contract is off. Do I want to carry out the sale or get out of it? Do I want to sue for breach or just get out of it?

Mike45

With this legal question, I am neither the buyer or the seller. I have asked this question on behalf of the seller.

I had a contract that the buyer had to deposit money to keep the deal in play by 15 days after the signing, or the deal was dead. Then on the 16th day my agent called the buyers agent and got blown off. We relisted the property. Then the buyer filed a lien against the title of the property, saying, "they were the buyer and I can't sell the property to anyone else"! A lien was placed on my property pending the outcome of a "hearing".

Doesn't matter what we say. Call the title company listed on the contract and ask them. Their word is the official word you need. To make things clean, they probably want a contract termination form signed and submitted.

Thanks Robert J,

I think you answered my question pretty well,..I will pass that answer on to the sellers here.

LOF,

Legal Question #2: I asking this one just out of my own curiosity.

Like above, a Buyer and Seller sign a contract to Sell a House. Earnest money is paid here. One week before closing, the Seller changes his mind (maybe he lost his job or had some other personal crisis). Seller wants out of the contract but the Buyer wants to buy house anyway and is willing to take this Seller to court to 'force him to sell his house',...regardless of his personal problems.

(this is not legal advice ... blah blah blah)

No the contract is still valid in NC. You must demand the Earnest Money and they have a business day to fulfill the demand.

Paragraph 1(d) of the NC 2-T Contract states: “Should Buyer fail to deliver either the Due Diligence Fee

or any Initial Earnest Money Deposit by their due dates… Buyer shall have one (1) banking day

after written notice to deliver good funds to the payee. In the event Buyer does not timely deliver

good funds, Seller shall have the right to terminate the Contract upon written notice to Buyer.”

there is a 2-step process set forth in the Contract if the Initial EMD or Due Diligence Fee is not delivered by its due date. The demand is given with NC Realtor form 355-T

Can't speak to your state's laws, but in Pa, every contract requires a consideration. It appears there was no consideration paid for the contract.

Did the contract outline the limits for non-performance. Typically it is limited to only the hand money. But since there was no hand (earnest) money the only question left is was the contract recorded?

Sisco

NE,

Roy, I get the desire to save $150, but in this case I think you do want a firm legal opinion from an expert in your location.

One thing I recall back when I had some Sellers refusing to perform: my attorney said it's a rare judge who will force someone to sell their house. The American tradition is to protect a persons' home, even if they have sign a contract saying they will sell it and even if everything has been done properly with all i's dotted and t's crossed. Like Sisco said, in Missouri it is common to have a 10% "failure to perform" penalty based on the contract price of the house, but that may or may not apply in your area. This may result in nothing more than a lien on the property, if the Sellers have no other assets/cash to fulfill the judgment.

Sid,

The sale might be over, but there is paperwork to be done before your seller is free of the buyer. Your friend needs to do that correctly. Is this not something that the seller's agent is handling for them?

In Idaho, if the seller doesn't perform and the buyer has done everything required in the contract, it is mighty expensive to back out of the sale. It is a lot more than a 10% penalty.

Oregon,

The is no 'seller's agent here. This resulted when the Devil was the first to answer the Ad of a FSBO. The devil was wearing a disguise so that his horns would not show.

I do not know your state's laws, but I have forced the sale of a residence when a Seller refused to go through with it. The lawsuit was for "specific performance." We sued to force the Seller to carry out his obligations under the written sales agreement. If I remember correctly, the Seller still refused to sign the papers, and the court clerk signed on his behalf.

Roy,

I spend $20 a month for LegalSheild subscription. (A MrLandlord vendor)

I can call and talk to a real atty any weekday with real questions like yours and get real legal answers for my state.

A full year costs less than one appt with my atty. I call several times a year. Has saved my rear many times.

Most of the "legal" type questions that are asked about on this Q&A forum can have many different "correct" answers. Depending upon not only which state the property is located in but in most cases (if the issue makes it to court) which Judge is actually presiding over the case will determine the eventual outcome. I do think that this is an excellent place to get some input on what others have experienced or think about a certain legal situation. I've found that many times a poster will offer a perspective that hadn't occurred to me as even being relevant to the original matter. However ultimately it's really up to each individual to analyze the responses & decide what is the best course of action for them to follow.

Many years ago when I had a need for some legal advice, I consulted a wise old Barrister who during our first meeting made 2 comments which I still vividly recall whenever I'm considering any sort of legal action.

"Law and justice are not always the same."

"In law, nothing is certain but the expense."

one of the elements of any contract (K) is "consideration". lacking that the contract is not valid. they did have a PROMISE of consideration (that equates to a promissory note in some areas) so that might serve until such time as they breach the promise to deliver the deposit timely. normally if the seller wants to proceed he might issue a notice to perform (deliver good funds) and then declare breach if they don't. but since the seller is now hesitating i would simply declare breach. the issue then becomes whether the buyer has any spine and a wallet to make a fuss. he will have a tough time making a case since he did not comply with the terms of the K.