New York · Chapter 09 of 26

Contracts and Contract Preparation

Elements of a valid contract, types of contracts, the New York contract of sale, binders and offers, options and rights of first refusal, the Statute of Frauds, remedies, the mandatory Property Condition Disclosure Statement, and how contracts are prepared upstate and downstate.

30-minute read · Built for the Salesperson Exam

competent partiesoffer and acceptanceconsiderationlawful objectStatute of Frauds (GOL §5-703)void, voidable, unenforceablebilateral vs. unilateralexecutory vs. executedbindercounteroffermortgage contingencyattorney reviewProperty Condition Disclosure Statement (no $500 credit)down payment in escrowinstallment contractoptionright of first refusalspecific performanceliquidated damages

Essentials of a Valid Contract

A contract is a legally enforceable promise. A valid real estate contract needs competent parties (of legal age, 18 in New York, and mentally competent), mutual agreement (a clear offer and an acceptance of its exact terms, sometimes called a meeting of the minds), consideration (something of legal value exchanged), a lawful objective, and, for real estate, a writing signed by the party to be charged. A void contract has no legal effect, such as one for an illegal purpose. A voidable contract is valid but may be cancelled by one party, such as a minor. An unenforceable contract is valid but cannot be enforced in court, such as an oral contract to sell land.

N.Y. Gen. Oblig. Law §5-703

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