08 Sep A Listing Agreement Prior To The Close Of The Transaction Is An Executory Contract
Last lesson, when we talked about elements of the treaty, we assumed that an agreement containing all the essential elements would be a valid and enforceable treaty. But that`s not quite the truth. Some contracts that appear to be technically valid are not enforceable and have no legal effect. In this lesson, we talk about the legal impact of current contracts and how contracts can become null and void and unenforceable. Let`s start with the first case – an agreement that is not valid if it is concluded. As a rule, a contract is not valid due to the absence of an essential element. For example, a contract may be invalid because it has an illegal purpose. A common example is an agreement between a supplier and a dealer to supply illicit drugs. The supplier and distributor may have negotiated a lot to get a deal that is beneficial to both. They may even have an exquisite delivery plan and think of all sorts of contingencies to compensate each other if things go wrong.
But for legal and public order reasons, the courts will simply not enforce the illegal agreement on the supply of drugs, regardless of how it was negotiated. The agreement is deemed void at the time it was drawn up, as it was drawn up for illegal purposes. Remember our hitman from the last lesson? His contract also failed because it was intended to fulfill an illegal purpose. Suppose the broker finds a buyer, but the seller refuses to sell at that time. Can the seller simply change his mind and avoid having to pay the brokerage commission? The usual rule is that if a broker finds a buyer who is “ready, willing and able” to buy or lease the property, he has earned his commission. Many courts have interpreted this provision in such a way that, even if buyers are unable to obtain financing, the commission is still due as soon as potential buyers have signed a contract of sale. To avoid this result, the seller should insist either on a “No Deal, No Commission” clause in the reference contract (which only allows the broker to pay if the sale is actually concluded), or on a clause in the sales contract that conditioned the purchase itself on obtaining financing by the buyer. Finally, another questionable contract is the unscrupulous treaty – a contract that no reasonable person would approve and no honest person would expect. Imagine, for example, an art specialist rummaging through the stalls of a flea market and stumbling upon an original van Gogh painting, which is put up for sale by someone who doesn`t know art or van gogh. . .