Obligations of Buyers & Sellers

1. Real Estate Sales Contracts
   1. A contract is a legally enforceable promise or set of promises that must be performed and for which, if a breach of promise occurs, the law provides a remedy.
   2. Essential Elements:
      1. Offer and acceptance
      2. Consideration
      3. Legally competent parties
      4. Legally permissible performance
      5. Writing
   3. Statute of Frauds & Alterations to the Contract
      1. All contracts for the sale of real estate must be in writing and signed by the party sought to be charged, in order for the agreement to be enforceable.
      2. Any alterations or changes to a contract must be agreed upon by all parties to the agreement and shown by signing or initialing the changes on the contract itself or by preparing an addendum with proper signatures.
   4. No misrepresentation, fraud, undue influence or duress.
   5. Revocation of an offer.
   6. Parol Evidence Rule. Unenforceable in Maryland.
   7. Signatures of party sought to be charged. Marital rights issue.
2. Discharge of Contract
   1. Partial performance of the terms along with a written acceptance by the person whom acts have not been done or to whom money has not been paid.
   2. Substantial performance.
   3. Impossibility of performance.
   4. Mutual agreement.
   5. Operation of law. [e.g. voiding of a contract by a minor; or statute of limitations.]
3. Default and Breach of Contract
   1. Violation, without legal excuse, of any of the terms or conditions of a contract--such as when a seller breaches a sales contract by not delivering title to the buyer under the conditions stated in the agreement. The breaching, or defaulting, party has certain burdens, and the nondefaulting party has certain rights.
   2. Seller Defaults:
      1. The buyer may rescind, or cancel, the contract and recover his or her earnest money.
      2. File a lawsuit known a suit for specific performance, to force the seller to perform the contract. Specific performance is ordered only when the subject matter of the contract is not otherwise available for money damages.
      3. Sue the seller for compensatory damages (a personal judgment).
   3. Buyer Defaults:
      1. The seller may declare the contract forfeited and retain the earnest money and any other payments as liquidated damages.
      2. The seller may rescind (cancel) the contact and return all payments the buyer has made.
      3. Sue for specific performance.
      4. Sue for compensatory damages.