13
9月

California Real Estate Option Agreement

The buyer argued that the seller benefited from the buyer`s work and the costs of obtaining the package sharing, which is sufficient consideration to support an option. However, the court was not entitled to bring a real profit to the seller. In addition, the Court concluded that the consideration “must be measured from the date of conclusion of the contract”, the date on which the contract does not impose positive obligations on the buyer and the buyer may terminate unilaterally. Thus, the court concluded that no consideration had been offered. Interestingly, the distinction between a unilateral treaty and a bilateral treaty is one of the first concepts that future lawyers learn in law school. In particular, a unilateral contract requires only the promise of one of the parties to a transaction. In contrast, a bilateral treaty is a promise of a promise that requires the fulfillment of both parties. Since the language of the contract at issue confers on the buyer “the absolute and exclusive discretion” to terminate the contract at any time during the duty of care, without being required to do anything, the General Court concluded that the contract was indeed a (unilateral) option agreement. Yet, “to be enforceable, you have to consider an option, like any contract.” The Court of Appeal accepted the Court of Justice that no quid pro quo was offered here. Therefore, there was no enforceable option and the seller, like the buyer, could leave at any time. The Court of Appeal upheld the Court of Justice`s conclusion that the agreement between the parties was not a contract of sale, but an option agreement (unilateral contract) to conclude a contract of sale. The agreement allowed the buyer to acquire the property at a specified price for a specified period of time, but did not require the buyer to provide services.

However, the option agreement was void, as the buyer offered no consideration for the option. The buyer also argued that the $1,000 bond represents the consideration needed to support an option. However, again, the court was not convinced, since these funds were to be either affixed to the purchase price or, if the agreement was not concluded, returned to the buyer. The funds were not offered in exchange for the call option. A majority of those who commented on the Steiner decision considered that the absence of positive obligations and the buyer`s unilateral ability to cancel were key areas of formulation to avoid a similar outcome. Unfortunately, there are a large number of forms agreements in circulation that have analog due diligence inspection timelines, including an optional provision of the California Association of Realtors (CAR) form, which can be considered invalid option agreements (without consideration). This is understandable, as buyers often want precisely these types of provisions in order to limit what is expected of them and give them the greatest flexibility to leave the company. As with everything else, the only sure way to get what you want is to pay.