Can One Ever Back Out Of A Real Estate Contract?
Like any other contract, real estate purchase agreements are usually set in stone once signed. However, if circumstances in your life change before the contract is signed, you may be able to escape with minimal damage to your personal finances, whether buying or selling. Florida law is generally even-handed with regard to favoring the buyer or the seller, unless fraud or duress has played a role in signing the contract – but the services of an experienced attorney can always come in handy.
Rare But Possible
The concept of backing out of a contract is generally known as rescission, and it happens when a contract becomes unenforceable for a reason not previously anticipated. Contracts are only enforceable when all the terms have been agreed between the parties – at common law, this is known as a “meeting of the minds.” If there is no meeting of the minds, the contract is usually void because it cannot be enforced equally against both parties. Normally, both parties know the position from which they are negotiating, but sometimes life events simply happen – and the contract they have entered into is no longer tenable.
In general, contracts are seen as unbreakable without just cause. However, there are exceptions, usually granted when unforeseeable circumstances occur. For example, the most common provision used to cancel contracts in recent years is known as the force majeure exception – essentially, canceling a contract when unforeseen circumstances make specific performance of that contract impossible. Many contracts fell through due to force majeure during the COVID-19 pandemic, when illness materially affected a person’s ability to pay or deliver on their part of a contract. Another common reason for rescission is when a buyer can no longer afford the home they have their eye on.
Rescission, Specific Performance, Or Another Outcome?
If your life has changed to the point where you need to bow out of a real estate agreement, there are certain things it is crucial to be aware of. Most real estate contracts follow the same or similar formats, but not every one is the same; depending on the clauses in your contract, you may or may not be able to simply claim contingency. In other words, if your contract does not contain a clause allowing you to bow out based on changed circumstances, the outcome of the deal will generally be up to the other party.
The other party may weigh their options and decide it would be best to let you out of the contract, or they might decide to file suit against you for an alleged breach of contract. If the other party files suit against you, know that Florida recognizes several different methods for handling the issue. Rescission is one of them, but a court may also decide that you owe damages to the non-breaching party, or that the situation is such that specific performance (honoring the contract as written) is required. Unfortunately, each case is unique, meaning that it is difficult to predict outcomes.
Contact A Tampa Real Estate Attorney
If you have suddenly experienced an unforeseen life change, you may want to simply consolidate your assets rather than go through a contract that may no longer be tenable. A Tampa real estate attorney can help answer your questions and manage your concerns when it comes to contract issues in Florida. Attorney Alicia Seward and the Seward Law Office are ready and willing to try and assist you. Call our office today to schedule a consultation.