What’s Necessary for a Contract to Be Valid?
For a contract to be valid, it must be legally enforceable, and the following must be present:
▸ Consideration
▸ Offer and Acceptance
▸ Legal Purpose
▸ Mutual Assent (“Meeting of the Minds”)
▸ Both parties agreeing to the contract must be of “Sound Mind”
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Consideration
Consideration is a benefit to each party from the contractual agreement and a change in each party’s position.
Consideration is either a promise to do something you are not legally obligated to do, or a promise not to do something that you have the right to do.
Contacts that lack consideration are unenforceable.
Courts rarely pass judgment on the amount of the consideration that’s exchanged in the contract, unless the amount is so disproportionate that it indicates one party acted unfairly to another party, or concealed information that created an unfair transaction.
According to REALTOR.org, a change in compensation offered must be communicated to other REALTORS® involved in a transaction prior to the time that REALTOR® submits an offer to purchase/lease the property, and after a REALTOR® has submitted an offer to purchase or lease a particular property, the listing broker may not attempt to unilaterally modify the offered compensation with respect to that transaction.