Enforcing & Interpreting Real Estate Contracts

In general, contracts establish agreements between people regarding their rights and responsibilities. Particularly in the realm of real property transactions and litigation, contracts are essential in establishing and protecting buyers' and sellers' interests. Indeed, real property sales involve unique and valuable property, and as such, it is increasingly important to protect your interest during such a transaction. At the Law Offices of Salar Atrizadeh a knowledgeable and experienced attorney with experience in real property transactions and litigation can guide you through the various legal concerns.

Real estate contracts, like other contracts, contain "conditions," which are acts or events that establish and modify obligations. According to California Civil Code § 1435, conditions may be concurrent, precedent, or subsequent. California Civil Code § 1437 defines concurrent conditions as requirements that establish mutual obligations of performance between a buyer and a seller to a real estate transaction. California Civil Code § 1436 defines conditions precedent as requirements that must be satisfied before a duty to perform arises. Finally, conditions subsequent arise after the contract is formed and these conditions eliminate a duty to perform. Both buyers and sellers are obligated to perform conditions within a reasonable time.

Well-drafted contracts are essential to successful real property transactions. For instance, in order to enforce a contract for the sale of real property, California Civil Code § 3391 requires that the contract must be complete and clear. The courts will not take it upon themselves to independently interpret contracts to enforce the sale of real property. As such, it is very important to make sure that a contract, related to a real property transaction, accurately spells out the terms and conditions of the agreement. While the courts may still enforce a contract that lacks a purchase price, or a definition for the subject property, both buyers and sellers involved in real property transactions can protect their interests by drafting a comprehensive contract.

In California, Civil Code §§ 1635 et seq. govern the general rules of contract interpretation. This includes deeds and leases for real property as well. Sometimes, the courts will look to business customs and practices to help interpret vague terms in contracts. In fact, Civil Code § 1639 establishes that, generally, the intent of the buyer and seller are based on the language of the contract. Accordingly, it is especially important to make sure that the contract clearly establishes your particular intent under the contract. Under California Civil Code § 1637, statutes can fill in certain aspects of the parties' intent if it is unclear or incomplete from the language of the contract itself. However, to ensure that such a significant transaction does not fall to the interpretation of the courts, it is vital to the interested parties' financial and legal interests to prepare a comprehensive contract in order to successfully enforce and interpret the real estate transaction.