Robert is a licensed broker-in-charge operating a real estate firm in Nashville. One of his affiliate brokers, Dana, has been negotiating a purchase agreement on behalf of a buyer. The buyer and seller have reached a verbal agreement on all terms. Dana tells the buyer the deal is done and they should start planning to move. Under Tennessee law, which of the following is correct?
Correct Answer
A) The agreement is not enforceable as a real estate contract because Tennessee's Statute of Frauds requires real estate contracts to be in writing and signed
Tennessee's Statute of Frauds, codified at Tenn. Code Ann. § 29-2-101, requires that contracts for the sale of real estate be in writing and signed by the party to be charged (or their authorized agent) in order to be enforceable. A verbal agreement on all terms, no matter how clear and complete, does not create an enforceable real estate purchase contract in Tennessee. Dana's statement that 'the deal is done' is premature and legally incorrect.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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