Part of this is really a legal question, so you should definitely consult an attorney unless you can negotiate an amicable end to the contract.
If you what you really want is to break the contract, you’ve already decided that you’re taking a route other than the legal one. The way you break any contract is to break it and take the consequences the contract specifies. Of course, aside from breaking the contract there are two other options:
- Seek legal advice to void or otherwise end the contract
- Negotiate a release agreeable to both parties
As the buyer in a contract with no close date, negotiating a release might mean relinquishing your earnest money, but at least if you can get the seller to agree to accept the earnest money and sign a release you’ll be done with the deal.
As the seller in a contract with no close date, you’re a little more stuck as a buyer wandering around with a contract on your property could interfere with future sales, so you have more at stake than a few hundred or even thousand dollars earnest money. If you want to cancel the sale because you simply no longer want to sell to this buyer, you should try negotiating a release with return of the earnest money; if it’s worth it to you, you may want to offer the buyer some compensation for their trouble if they will sign a solid release. If you want the sale to go through but the buyer is stalling, you might want to consider legal action to compel specific performance. It’s possible that a court may order a closing, essentially setting a close date. It’s more likely that the court will determine that the absense of a closing date represents a failure to have a “meeting of the minds” and could end up releasing you from further obligation. Of course any decision on legal action should involve an attorney.
Why would the court set aside the contract? A closing date isn’t itself one of the key elements of a contract, but it certainly is a major flaw if a contract doesn’t have one. It may even mean there was no “meeting of the minds”, which is one of the key elements:
…each side must be clear as to the essential details, rights, and obligations of the contract. Putting the deal down on paper prior to signing it goes A LONG way to avoid future misunderstandings and disputes. Meeting of the minds sometimes can be expressed by words spoken or gestures made or can be inferred from the surrounding circumstances. There is no meeting of the minds if: (1) one side is obviously joking or bragging, (2) there is no actual agreement (i.e., the farmer who is selling a gelding and the buyer thinks the horse is a brood mare), or (3) both sides have made a material mistake as to the terms or details of the contract.
From Key elements“>Key elements?
The parties to the contract have a mutual understanding of what the contract covers. For example, in a contract for the sale of a “mustang”, the buyer thinks he will obtain a car and the seller believes he is contracting to sell a horse, there is no meeting of the minds and the contract will likely be held unenforceable.
From Contract law an introduction
I thought surely this must be a pretty uncommon situation until I ran across this from Monika McGillicuddy, New Hampshire Real Estate Broker & Trainer:
Listing agent…”Well uhhh that’s part of the problem…we don’t have a closing date!”
Me…”What?? No closing date…How could that be? No closing date…no contract…not a valid contract in my opinion…BUT why would you have your seller sign a contact without an end/closing date? And what about the addendum…the kick out clause…gotta have a date on that?”
Listing agent…”Well ummm that’s the other problem. It’s a loosely written addendum written by the buyer agent and has no date.”Me …”A Loosely written addendum…no closing date? How in the world could a professional let that slip by them?”
So guess what? No dates, anywhere and this contract was fully executed by all parties and now buyer # 1 won’t sign a release…even though I know it’s not a contract…I’m not an attorney… just a real estate agent who happens to know contract law.
Now these sellers will need to hire an attorney to help get them out of an invalid contract that they never should have signed to begin with. They are not happy sellers and the listing agent and his broker are both squirming. They are hoping that the seller just plays nice and gives buyer # 1 a little more time, they know if the seller hires an attorney that they will be the first one the attorney points a finger at.
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