Legal Effects of a Contract
November 9, 2020
Once the contract is signed, there are legal effects of that contract. There are four ways of classifying contracts. One is a valid and enforceable contract. That simply means it has all the essential elements of a contract and it is in writing, which makes it enforceable. This is what we want all the time. A second way we can classify a contract is a void contract, which means it has no legal effect whatsoever. A couple of examples of a void contract would be a contract for illegal activity or someone who signs a contract who is not of sound mind. Those contracts would be classified as void and have no legal effect whatsoever. A third type is called a voidable contract, which means we have mostly all of the essential elements of a contract, but something is not quite right. What makes it not quite right, makes it capable of becoming void. Some examples would be a contract signed by a minor. A minor is not of legal age. So, if minor signs the contract, the minor can void the contract up until the minor becomes of legal age. Once a person becomes a legal age, the person must then make up their mind whether to ratify and accept the contract or to void out the agreement. Another example of a voidable contract is someone who signs a contract when intoxicated. That would be a voidable contract.
Another type would be a misrepresentation. There are two types of misrepresentation that would be considered voidable contracts. One is called innocent misrepresentation, like a situation where a licensee fails to disclose something that was in the multiple listing service information, for example, and just overlooked it. Another type of misrepresentation, fraudulent misrepresentation, is when their licensee flat out lies simply to close on a transaction and to make some money. Either one of these types of misrepresentation to however would be a voidable contract. For example, if a seller told a buyer that the property was zoned commercial, and after closing the buyer found out that it was actually zoned residential, that the seller had lied, then the buyer would be able to go back and try to void out the agreement due to the misrepresentation. The only one that can void out the agreement in these voidable contracts is the injured party. The injured party is always minor, or the person who was intoxicated, or the person who was misrepresented. A fourth area we have is called an unenforceable contract, which will be like an oral contract for real estate. The statute of frauds says that contracts for real estate if you want to enforce them, must be in writing.
Principles of Value
January 6, 2021
In this article, we discuss how a property's value is determined, the purpose of appraisals, and the different types of depreciation. Learn more by reading this short and focused article on property appraisal.
January 6, 2021
Since 1866, there have been several acts that protect certain classes and sects of US citizens. In this article we review what each of them did and who is protected under each act.
Approaches to Valuation
January 6, 2021
In this short article, we review the four main approaches for property valuation - Market Data, Cost, Income, and Appraisal. We've outlined these four different approaches in an easy-to-digest manner that will help you learn how properties are appraised and valued.