Generally speaking, a contract is an agreement with specific terms between two or more persons or entities in which there is a promise to do something in exchange for a valuable benefit known as consideration.
Although it may seem obvious, an essential element of a valid contract is that all parties agree on all major issues. While anyone can make an offer, a contract cannot be formed until the offer is accepted, resulting in a meeting of the minds.
Among the many critical terms to be addressed in a contract is time of performance. Parties to a contract should therefore identify the time of performance with as much specificity as possible, evidencing a common understanding.
Section 1d of the Residential Resale Real Estate Purchase Contract (the “Purchase Contract”) asks the parties to state a date upon which Close of Escrow (“COE”) will occur. Although contracts are not required to identify a specific date for close of escrow, a date certain is the best way to identify with particularity when this important event will occur. It will also ensure that the expectations of both the buyer and seller are the same, thereby avoiding a potentially costly dispute. Nonetheless, instances occur in which a day, month and year are not entered on line 18 of the Purchase Contract. In contradiction to what the date field requests, it has on occasion been populated with ambiguous terms such as “after Labor Day” or “upon completion of all repairs.”
In an effort to address this issue, zipForm® will now limit the field on line 18 of the Purchase Contract strictly to a day, month and year. When the field is being populated, REALTORS® will be presented with a calendar and asked to select a precise date on which escrow will close. While this date can subsequently be changed via an Addendum, limiting the manner in which the date field can be populated will help avoid ambiguity and uncertainty in regard to this important contractual term.
Scott M. Drucker, Esq., a licensed Arizona attorney, is General Counsel for the Arizona Association of REALTORS® serving as the primary legal adviser to the association.
This article is of a general nature and reflects only the opinion of the author at the time it was drafted. It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.