Rachel is a broker associate in Colorado representing a buyer who wants to add a custom contingency clause to the CREC-approved Contract to Buy and Sell Real Estate. The buyer wants the contingency to state that the sale is subject to the buyer's spouse approving the property after a visit. What should Rachel do?
Correct Answer
A) Advise the buyer to have a licensed Colorado attorney draft the custom contingency language
Colorado licensees must use CREC-approved contract forms and are not authorized to draft their own contract language. However, if a client needs custom contract language that is not available in the CREC-approved forms, only a licensed Colorado attorney may draft that language. Rachel, as a broker associate, would be engaging in the unauthorized practice of law if she drafted custom contingency clauses. The correct course of action is to refer the buyer to a licensed attorney for any non-standard contract language.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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