Can a contract that has been terminated be brought back to life?
QUESTION: I represent a buyer who was under contract using the Offer to Purchase and Contract (Form 2-T). The parties were attempting to negotiate a credit in lieu of repairs when the Due Diligence Period was about to end. Since we didn’t have a signed agreement, the buyer terminated the contract to protect her right to a refund of the Earnest Money Deposit. The next day, the listing agent informed me that the sellers were willing to agree to the buyer’s requested credit. My questions are, can my buyer’s termination be “undone” so the parties can continue with the contract they signed? If not, would it be sufficient for them to sign an Agreement to Amend Contract (Form 4-T) reflecting their agreement to increase the amount of buyer expenses the seller will pay? We’d rather not create a new contract because we are concerned that the lender may require the buyer to start the process all over again. What do you think?
ANSWER: The good news is that we believe the contract can be effectively “restored.” However, we don’t think it can be accomplished by the buyer’s attempt to unilaterally withdraw their termination of the contract. In our view, it would require the written agreement of both parties. There isn’t a standard form designed for this purpose. Although it can be argued that the parties’ execution of an Agreement to Amend Contract is proof of their intent to continue with the original contract, such an argument is based on inference, and it’s not prudent in this situation to rely on inferences that may be drawn from the conduct of the parties. We strongly recommend that an attorney (not one of the brokers!) be engaged to draft a simple document that would contain a brief recitation of the facts and an express agreement by the parties to complete the purchase and sale of the property according to the terms of their original contract, as amended to increase in the amount of the buyer expenses the seller will agree to pay. We believe the closing attorney would be in a position to create such a document.
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