Types of Contracts

The real estate contracts can be of two types, unilateral and bilateral contract. The unilateral contracts are those in which the seller has agreed to sell his property but the buyer has not agreed to buy the property and still have an option to buy the property or look for another best option. The bilateral contracts are those in which the seller has agreed to sell his property and the buyer has also given assurance to the seller that he will buy the property of the seller. Both the buyers and sellers must be well aware of these two types.

Basic legal requirements of a contract

There are some legal requirements which must be fulfilled to make a contract valid in the eyes of law and the parties participating in the contract must know these basic legal requirements. Mutual agreement

The first requirement says that there must be a mutual agreement between the buyer and seller to buy and sell the property. Both parties must agree to the terms and conditions of the agreement. Both parties can give their confirmation by signing the agreement so the agreement must have signatures of both parties.

Written in nature

The second requirement says that the agreement between the parties should be in written form because if an agreement is only verbal in nature then any of the party could withdraw itself from the agreement anytime it want to do so and the other party will not be able to take any legal action against the party that has withdrawn itself from the agreement. If the parties do not want this to happen then the parties must prefer to enter a contract only if it is written in nature.

Identification of the parties

The third requirement says that the agreement must identify the parties involved in the contract. This must include the first name, last name with the middle initials of both the parties. The full address of both parties should also be there in the agreement. If a contract misses any of this important information then the contract cannot have legal binding on the parties.

Consideration

The fourth requirement says that the contract must contain details about the consideration. The buyer gives the consideration to the seller in return of the transfer of ownership. The consideration can be in form of purchase price, or any other asset that has same value.

The knowledge of these basic legal requirements of the contract will help the parties to make a valid contract between them and close it successfully.