Why are Real Estate Contracts Required?

The economic effect of any agreement is to shift the risk from one party to another. In a real estate contract, you specify how the constructor should develop the property. The catch is that developing a property is a long-term commitment. Without a written contract, as time passes, the possibility for non-performance increases. Without signed proof to enforce the original agreements, it is just a he-said-she-said argument.
The risk, however, need not be shifted totally from one party to another. Generally, it is assigned so that each party shares the uncertainty in the contract. If the risk beats the tolerable limits, it is assigned to either party alone. For this purpose, every provision in a construction contract can be interpreted as a mechanism for shifting the risk.
A real estate agreement outlines the terms of engagement between the client and the developer. It helps in mapping out a plan of action to be followed for the duration of construction. This is a great way to communicate expectations among the developer and the client. Because of how dynamic the changes in property development are, it is supposed to be prepared after exercising due care.

Drafting a Real Estate Agreement:

Writing a construction deal can be complicated because you have to envisage and quantify so many things that are abstract yet. Much of the deal is based on guesswork quantified because the specifications can be volatile. If you don’t have much experience in drafting agreements and but are entering into a construction contract for the first time, it can prove to be quite a hurdle.
Our real estate documents are cumulative efforts of all the legal knowledge gained over years of industry experience. When you buy our templates, you buy security, quality, and carefully drafted terms that have been proof-read by industry experts and peers. You can relax after buying these templates because your interests are taken care of in property development.

One crucial clause that a construction contract needs to include is regarding third party claims. If a third party has suffered because of the property development, you can have a potential lawsuit brewing.

That is why, any contract is a vessel for transferring the maximum liability onto another party, and a real estate contract is no different. If a contract isn’t appropriately drafted, the property developer could use the loopholes to cause significant loss to the client.

When you purchase our agreements, we offer completeness and quality. We have a comprehensive set of agreement templates that you can buy. Each of those is tailored for a specific purpose and use.

Contents to be in the Contract:

• The scope of work that each party is responsible for
• Permissibility for altering the contract at any stage of the contract period, and the procedure to do it.
• The payments schedule to be followed, and the mode of payment to be made.
• Any warranty information that should be included for any construction and projects already completed.
• Any default provisions subject to the laws that a contract would need to abide by
• Process of dispute resolution, and any arbitration process along with jurisdiction issues that the parties want to include.

Further, the agreement would have the details of the builder’s responsibilities with specific timelines and deadlines. If both parties orally decide to exercise penalties on late deliveries, then that should be mentioned in the agreement. The agreement must also include governing laws, dispute resolution methods, and termination policy. It should also add the details of the payment method

Purose of the agreement:

• It outlines all the responsibilities of the builder
• It gives out specific timelines and deadlines for each task
• It makes the business deal a legally binding one