Contractual law is a stringent part of the legal process. When someone enters a contract, they want to ensure that it does not become voidable, especially when money is involved. This is especially true with real estate contracts.
A new contract will not automatically void an old one. It will depend upon what the terms of the contracts are and the legality of the contract itself. But in general terms, a new contract will not automatically void an old one, nor will an old contract void a new one; the two are usually separate legally binding contracts.
Table of Contents
- Why A New Contract Does Not Void An Old One
- What Makes A Contract Valid?
- What Makes A Contract Null And Void And Voidable?
- Related Questions
Why A New Contract Does Not Void An Old One
Generally speaking, a new contract does not automatically avoid an old contract. This is especially true with contracts that have to do with real estate.
Let’s say, for example, you are renting an apartment, and you have a contract for the apartment for five years; this contract is legally binding. You have agreed to the terms of the contract.
Let’s now say you want to rent another apartment in the same building with the same owner. The new contract will not automatically void your first contract. It will instead be an additional contract.
In this example, you can see that two contracts are considered valid. Adding a new contract does not automatically void the older contract unless, for some reason, it was explicitly written that the first contract would void the second contract.
What Makes A Contract Valid?
To understand this aspect of the law, we need to understand what makes a contract valid or what is considered a legally binding contract. Understanding this is especially important for real estate law.
Contracts Have Offer And Acceptance
Contracts have offers and acceptance. In other words, if you want to purchase a new house, you will make an offer on that house. The person selling the home will accept your offer and then take the home off the market.
If you sign a contract and give earnest money at the point of offer and acceptance, the contract has become valid.
In some jurisdictions, if an offer and acceptance are made verbally, that can be considered a legally binding contract. In other jurisdictions, it needs to be written down. When an offer is accepted, you must understand precisely what is considered valid for a contract.
Elements In Most Contracts
For a contract to be considered valid, most contracts should have three different elements. These three elements are:
- Subject And Details – A contract must have a subject and details of the contract terms. The central core of this is about the offer and acceptance. What was the offer, what was accepted, and the agreed-upon period of the contract should be listed? The contract should also be signed.
- Consideration – The consideration part of the contract is the reason why the contract is being made or the value each party will receive from the contract. This would be, for example, the amount of money you will pay for a house and the amount of money the seller would receive.
- Capacity – The contract must have capacity, meaning that you must sign a contract with someone who is legally able to sign the contract. That individual must be of a sound mind and have reached the legal age of 18 in most states. That individual must also have the proper authority to enter into the contract.
What Makes A Contract Null And Void And Voidable?
There could be some circumstances where the way the contract is written or the terms of the contract cannot be fulfilled. When the contract is null and void, it is as if it never happened and was never valid.
The terms null, void, and voidable are not the same in the legal sense.
A null and void contract is considered one that could be dead on arrival because it was never considered valid. This means the contract was never legal and never a contract that should have been written as it was never valid.
Elements That Can Make A Contract Null And Void
They’re four specific elements that could make a contract null and void. If you are missing one or more of these elements, your contract could become null and void and not be considered valid.
Here are the four essential elements:
- Subjects in The Contract Are Illegal – The main reason would be if the subject of the contract is not legal. Let’s say, for example, you try to sell your parent’s house, but you are not the legal owner; then that contract would be considered illegal, null, and void.
- Terms Of The Contract Are Vague Or Impossible To Fulfill – The next term could be that the contract cannot be fulfilled. Part of this could be what is known as a force majeure, meaning that you are supposed to supply fish to a restaurant, but suddenly, the government decides that they’re going to ban all fishing. This would then be a contract that would be impossible to fulfill due to conditions outside your control.
- Lack Of Consideration – Lack of consideration means that there needs to be a clear objective for the contract. The parties need to both clearly understand the obligations that are required of them. So a lack of consideration in a contract could be a reason why a contract could be null or void.
- Fraud – A contract could automatically become invalid because one party got the other person to sign it by lying, cheating, or concealing specific facts. For example, let’s say you buy a house, but the owner does not tell you certain things about the property, including some easements that are on the property or a lack of right away. That could be considered fraud as you did not entirely understand what you were buying and the restrictions placed on the land purchase.
Elements That Can Make A Contract Voidable
A voidable contract is a contract that could have been deemed valid, but if both parties agree to avoid the contract, then the contract will no longer be valid and is voidable.
Some of the reasons a contract may be considered voidable could be:
- Coercion Or Undue Influence – Someone tried in some way to force someone to sign the contract.
- Withheld Or Misrepresented Information – If someone willingly withholds or miss misrepresents information, a contract could be considered voidable.
- Breach Of Contract By One Or More Parties – The parties cannot meet their contractual obligations.
- One Or More Of The Parties Lack The Capacity To Enter Into The Contract. – This is why it is essential that whenever you’re signing a contract, be sure that the party who is signing the other part of the contract has the capacity and the legal authority to enter into the contract.
Contractual law is very detailed and specific. If you have a contract that you feel may be null, void, or voidable, the best thing you can do is speak to a lawyer in your area where the contract was signed to get their legal advice.
Even specific parts of the United States could have different rules when it comes to contracts. That is why we always recommend that when you have an issue with a contract, especially a real estate contract, you talk to the proper legal authorities to help you navigate all the legal aspects of the contract.
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Related Questions
Can You Legally Live In A Commercial Property?
You cannot live in a property that is zoned as a commercial property. Zoning laws in places like the United States are pretty strict. They usually fall under the state and also county and municipality jurisdictions. To legally live in commercial property and to make that property your residence, it should be lawfully zoned as residential property or what is known as a mixed zone property.
By clicking here, you can read more about Can You Legally Live In A Commercial Property?
Can I Kick A Cop Off My Property?
If the police enter your property without your permission, you can ask them to leave your property. But if the police have a warrant or feel there are extenuating circumstances, they may have the right to enter your property. Generally speaking, the Fourth Amendment protects property owners.
By clicking here, you can read more about Can I Kick A Cop Off My Property?
