Can a buyer exercise an option in a conditional contract?
A buyer could therefore enter into an option agreement and at the same time, for example, apply for planning permission in respect of the land. If the buyer obtains a satisfactory planning permission during the option period, it can then decide whether or not it wants to exercise the option and purchase the land.
Can a defending party challenge the existence of a contract?
For a defending party to challenge the existence of the contract, that party must provide evidence undermining one or more elements. Does a Contract Have to be Written? In general, there is no requirement that a contract be in writing.
Which is less attractive option agreement or conditional contract?
An option agreement is less attractive for a seller because it is out of the seller’s control whether the sale will actually complete. Whilst the land is tied up in an option agreement, the seller is unable to dispose of it to another buyer.
How to successfully limit your contractual liability [ PDF ]?
The NEC4 ECC adopts a similar approach at Option X18.5, limiting liability to an amount specified in the Contract Data. Another approach is to cap liability at the level of PI cover, as with the RIBA Standard Form of Appointment used for Architects in the UK.
Why is it important to know the limits of a contract?
If a business agrees to one to two contracts with very high or unlimited liability, that means additional risk, but only with regard to a couple relationships. This risk is not only easier to quantify, but more manageable, and the business can weigh whether taking on the risk is worth the reward of closing that particular deal.
Are there any improper conditions in a contract?
But, at times, some parties look to gain an advantage over their contracting counterparts. False statements, unfair agreements, and a lack of bargaining are a few of the situations in which parties find themselves in dealing with other contractors. Misrepresentation is a false statement of fact that is used to induce a party into a contract.
When to consider collective risk in a contract?
In order to be due-diligence ready and attractive to investors and acquirers, a company should consider the collective risk in all of their contracts. If a business agrees to one to two contracts with very high or unlimited liability, that means additional risk, but only with regard to a couple relationships.
How are parties to a contract expected to operate?
Parties to a contract under United States law are expected to operate with a good faith effort towards completing their performance. But, at times, some parties look to gain an advantage over their contracting counterparts.