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Contract obligation

DEFINITION

A contract obligation is a duty that all parties of a binding contract are responsible for maintaining and keeping up with. Every contract has concessions and details defining an asset that both parties have an interest in. This can be an agreement over money, property, services to be rendered, product, or an automobile such as a car or truck. In Real Estate is specifically refers to property, how that property is handled and the amount a property is worth. On party is obligated to release the property and the other party is obligated to pay for the property. Contracts specify the terms in which this transaction is handled, from the price of the property even down to the method of the sale. Such a contract could even specify a place and time for such a property sale. A contract obligation encompasses all of this, and both parties must adhere to these terms. If even one of these contractual obligations is not adhered to by another party, then it is considered a contract breach. This typically means the contract is terminated but not always. When this happens, and the contract is void, and any damages are paid for by the party that caused the breach. A contract protects both parties from economic loss due to the other party breaching the terms of the contract.

EXPLANATION

What Specifies A Contract Obligation?

Looking at them specifically, contract obligations are an individual aspect of a contract specified by certain terms. This could be the cost of payment. The buyer is lawfully bound to pay the amount specified in the sale and have the money at the specific date and place stated by the contract. Delivery or releasing of the property is another aspect of contract obligation. For products, this is a specific time and date that the seller must provide them on. For Real Estate it usually means a closing date in which the seller must relinquish the property and move out by or have any current tenants leave be if specified in the contract.

Finally, there is the quality of goods or condition of the property. Imagine you’re selling a car and show the buyer pictures. In a contract, the car must remain in its current state or condition until it is in the buyer’s possession. For a property this means like the state of the paint job on the walls of the home or something of that nature. It has to be as the buyer saw it when they decided to sign the contract and purchase it until the closing date and it is officially their’s. All of this conditions and obligations can vary depending on each party’s individual interests. Contract obligations even go all the way down to each party dealing with each other honestly and with a certain sense of morality. Both parties are bound by such principles to adhere to the contract they signed.

Is It Possible To Transfer Contract Obligations?

In some cases, it is indeed possible to transfer contract obligations to another person, party or group. In real estate, it is often a contractual obligation to fix something wrong with a property before the sale is complete. Say the seller is obligated to paint the house before the closing date. They can pass off this responsibility to a third party that offers such services. This is typically called a “Contract Delegation” that the seller will pay for. It is important to note that some contracts have obligations and terms in them that prevent this from being done, but for something like painting or simple repairs, this is unusual. The only time it is common is with some special contracting or craftsmanship requiring the seller to do it themselves. This is extremely unusual in real estate sales.

Is A Real Estate Agent Or Lawyer Required To Specify Contract Obligations?

This really depends more on what the contract itself is for. If it is a real estate contract, then the answer is typically a real estate agent. However, some real estate transactions require both a lawyer and a real estate agent. Obviously, you would not need a real estate agent for an automobile sale or the sale of a large piano. It is sometimes wise to hire both to dive through real estate obligations, though as they can be tricky in some cases. A legal dispute caused by a contract breach due to contract obligations not being adhered to is a good time to call a lawyer.

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