Contracts and Contract Law
Formation and enforceability
A valid real estate contract needs an offer, acceptance, consideration, capable parties, lawful purpose, and mutual assent. For land sales, Tennessee's statute of frauds requires a writing signed by the party to be charged and containing the essential terms: parties, property description, price, and signature. A counteroffer is a rejection plus a new offer; it terminates the original offer. Acceptance must be a mirror image-adding a new term is a counteroffer, not acceptance. Electronic signatures and faxed signatures generally satisfy the writing requirement when the parties intend to be bound.
Performance, contingencies, and remedies
Read contingencies literally: financing, inspection, appraisal, sale of buyer's home, and title review. Missing a deadline can waive a contingency or create breach. Earnest money is not automatically liquidated damages; the contract must say how it is applied. Remedies include damages, specific performance, rescission, and forfeiture of earnest money where agreed. Distinguish assignment (transfer of contract rights) from novation (new party replaces old). Options and rights of first refusal are not the same as a binding sale contract.
Traps and worked rule
Questions often test verbal land deals, “acceptance” that changes price, and agents who promise a loan will be approved. A buyer offers $300,000; seller counters $310,000; buyer says “I accept the original $300,000.” There is no contract-the counteroffer killed the original offer. Rule of thumb: mirror-image acceptance, essential terms in writing, and deadlines in the calendar.