A contract can fail for illegal purposes that are less frightening than murder or discrimination. You will remember the previous lesson that each state enacted a law called the Fraud Act, based on an old English law of the same name. The old and new fraud laws stipulate that a contract that gives an interest to real estate must be in writing. If real estate contracts are not written, the courts will not enforce them. (The only exception to the writing requirement is a lease with a term of less than one year.) Consideration is any legal value offered and exchanged in the contract. It can be money, services or other valuable goods. Love and affection are even an example of consideration in some treatises. The consideration must be set out in the contract. Contracts are at the heart of real estate transactions. Contracts play an important role in real estate at every stage of the process, from sales contracts and sales contracts to debt securities and mortgage documents. However, there are fewer pleasant opportunities to terminate a contract. A court has the power to terminate a contract if the contract is invalid or questionable, as we said in an earlier lesson.
With an idea that is akin to the legal disadvantage test, courts often say that the quid pro quo must be negotiated. In other words, each party must agree to perform its acts within the framework of the treaty on the basis of the treaty. This idea focuses on whether the parties have actually negotiated the commitment they have made. If the parties had nevertheless performed the acts without the contract, the courts cannot be taken into account in these acts. From this point of view, past acts generally cannot serve as a counterpart to a treaty, as past acts have not been negotiated during the negotiations. Some new negotiated measures are needed to take this into account. The Reformation is another remedy that a court can apply. Reform is appropriate when the parties have entered into a contract, but they have done a poor job of writing what the treaty actually requires.
The objective of the Reformation is to reorganize the treaty of the parties so that it adapts to their original intention. During the Reform, the Tribunal did not try to impose new conditions on the parties. On the contrary, the Tribunal seeks to clarify the respective obligations of the parties and to give them an enforceable contract that reflects those clarified obligations. But not all contracts run smoothly. Sometimes the parties disagree on what the treaty requires.