Analyzing a Contract
A contract is a joint union between two or more voluntarily parties. In most cases, the main intention of any contract is the creation of a legal obligation among the parties involved. Contracts can also be defined as legally enforceable promises made by two or more parties (Blum, 2010). However, contract law varies from one jurisdiction to another. When a breach of contract occurs, the only remedy can include compensation of money. This paper will critically analyze the contract for rental of real estate property.
In contract law, the aspect of enforceability is defined as a legal obligation that poses a need to perform something. This asserts that an agreement, which arises from a social obligation, is not a genuine contract (Blum, 2010). In most common jurisdictions, contracts have several elements including a mutual assent, consideration, sufficiency, offer and acceptance. Nowadays, there are several contracts that require approval by individuals especially in the business field. The general understanding of contracts and the laws associated with agreements has substantially enabled several individuals to improve their career and personal life.
In the business world, there are several types of contracts that hugely depend on the legal transactions that are involved. Some of the most common transactions involved in contracts include the transfer of property and sale of goods (Blum, 2010). Contracts can be organized into three focal categories which include performance, formation and validity. In addition, there are several classifications under each of the main categories that have been mentioned.
In business law, a legal and formal advice is required before implementing the business contract (Blum, 2010). Some of the most common types of contracts in the business world include adhesion contracts, aleatory contracts, void and voidable contracts, executed contracts, implied contracts, express contracts, unconscionable contracts and bilateral and unilateral contracts. Furthermore, there are numerous, broad categories of contracts which are involved in business dealings. These categories include leases, sales-related agreements among other general business contracts. Employment-related agreements can also be classified under the main categories of business contracts.
The sales-related agreements usually entail a bill of sales. This shows that the two parties are involved in an agreement for the sale of goods. The documents involved in the sales-related agreements include a purchase order, a security agreement and a limited warranty (Blum, 2010). These documents differ depending on the form of agreement involved but, they are used in the documentation of the sale of goods and services.
The bill of sale shows the transfer of a commodity from a party to another. This document shows the price and the means of delivery of the commodity. The purchase order is also a crucial document which is presented by a potential buyer for the purchase of several goods and services (Blum, 2010). Lastly, the warranty is a guarantee that covers the sale or even the purchase of goods and services.
Leases also fall under business agreements. In the business world, leases fall under two main categories that include equipment leases and real property leases. The equipment leases encompass the leasing of equipment while real property leases deal with property (Blum, 2010). The rest of the contracts are lumped in a general category of general business. Some of these contracts include joint venture agreements, releases, assignments and indemnity agreements among others.
As stated above, a contract for rental for a real property is an agreement whereby payment is made for the temporary use of goods or services that are owned by another party. In this case, a gross lease involves a situation where the tenant pays a fixed amount of rent while the landlord covers all the property charges incurred from the ownership. This contract can be used in several instances (Blum, 2010). For example, if an individual plans to stay in a certain setting for a limited period, the best option is to rent a house. The individual should consider the amount of rent paid for the house. When renting a real estate, the tenant and the lessor who is the landlord are involved in the contract.
The tenant is the individual who pays rent to the owner of the property who is the landlord or landlady. In this contract, the rented estate may be part of the whole estate or even the whole estate. The renting of real property is governed by the real estate law. According to the real estate law, an apartment, building, farm, parking space and business offices are also classified as real estate properties (Blum, 2010). The agreement involved in this contract is known as a lease that encompasses several property rights.
In this contract, there are third party beneficiaries who receive the rights under the contract. The third party individuals are known as the assignees. The assignee can enforce the contract laws against the obligor. The assignee has the ability to sue the obligor for breach of duty (Blum, 2010). The financial concerns of the tenants and the landlords involved in the contract are governed by federal, state and local laws. These laws and regulations dictate some of the acceptable behaviors between the tenants and landlords. There are fair housing regulations which protect the tenants against some prejudicial actions by the landlords.
These actions include discrimination of the tenants based on their race, religion, sex, color and their background. In most jurisdictions, there are habitability laws that ensure that there are minimal standards of habitability (Blum, 2010). When the landlord fails to address issues related to the maintenance of the real estate property, they might suffer immense losses in the long run. The agreement between the two individuals is also considered as a law that governs the individuals involved in the contract.
Therefore, when these regulations are not adhered to, the landlord has the ability to evict the tenant from the real estate property through cancelling the lease. In the contemporary world, most tenants are evicted when they fail to honor the agreement or fail to pay their rent (Blum, 2010). This agreement also stipulates that there should be a security deposit that is to be remunerated by the renter. This amount should be refunded to the renter when he is evicted from the rental property.
However, if the tenant was responsible for several damages caused to the property, then, the security deposit can be used to cover for this damage. The landlord also has the ability to perform legal action against the leaseholder in a court if the damages caused are quite extensive and the tenant has refused to cater for the damages (Blum, 2010). The federal laws are continually becoming extremely complex in order to regulate the real estate industry.
This contract is ultimately fair to the parties involved because they both benefit from each other. For example, the tenant benefits from the shelter offered by the landlord. On the other hand, the landlord also benefits from the tenant when he receives payment for his property. Therefore, they both benefit from each other in a major way. Further analysis proves that the contract of leasing rental property is fully integrated (Blum, 2010). However, there are several queries that are prevalent from the contract. For example, the aspect of returning the security deposit to the tenant after using the facilities of the landlord is absurd. This is because when the landlord does not have the capacity to reimburse the capital in a timely manner, he or she is entitled to triple the amount as a refund. The common law should revise the security deposit rules that are included in this contract to enhance equilibrium between the two parties.
The contract of leasing rental property allows the assigning of several rights. However, there are several countries that prohibit the assignment of certain contract rights. This happens when the tenant agrees to pay the security deposit and occupy the real estate property. Therefore, after the tenant occupies the house, he or she is provided with the keys of the house. This gives the tenant the right to access the house at any time within the contractual period (Blum, 2010). In addition, the tenant also receives a copy of some of the rules and regulations in the rental property. This asserts that the tenants are also supposed to adhere to the regulations that have been set up by the landlord/ lady to avoid eviction from the estate.
This contract is assigned when a potential tenant pays the required amount of security deposit. The potential tenant should also assure the landlord that he or she will occupy the property as soon as possible (Blum, 2010). When validating the contract of leasing property, the potential tenant and the landlord/ lady are the main parties involved. However, if the obligor highlights that he wants to appoint another individual to perform his contractual duties the operations can be altered. However, it depends on the individual’s ability to execute the duties appropriately.
In most cases, this business will be affected because the hired individual does not have first hand information regarding the real estate property. Most of this information can only be provided by the property owner who is the landlord/ lady (Blum, 2010). According to the contract law, the landlord/ lady have the full mandate to perform the contractual duties since; they have all the information aimed at persuading the potential tenants to validate a contract with the landlord.
In conclusion, an assignment agreement involves assigning the contract rights to another party. The agreements are in written form. Some of the rights in this contract include the right to the interest of the real property, right to wages and a right to sue the assignee in case of breach of duty. The assignment agreement is also supposed to be assigned in a clear and understandable language. This enables the assignee to start executing the agreement. In most countries, once the assignee has enforced some rights against the will of the obligor, the assignor and the assignee do not have the right to rescind the assignment (Blum, 2010).
Contract for Rental of Real Property
This contract is made on MM/DD/YY, between _____________________ (hereafter “Landlord”) and _____________________ (hereafter “Tenant”). Landlord hereby agrees to rent to Tenant the property located at _____________________________ under the following terms:
This agreement is a fixed-term lease beginning on MM/DD/YY and ending on MM/DD/YY. It shall be converted automatically to a month-to-month lease upon expiration of the lease term, unless either party notifies the other in writing at least 30 days prior to the lease’s expiration that the party does not wish the lease to continue.
1. Tenant shall pay Landlord $X on the 1st day of each month for rent of that month. Payment shall be in the form of personal check, cashier’s check, or money order only, and shall be delivered by hand to Landlord or via U. S. Mail addressed to ____________________________________________.
2. If payment is not received by Landlord by the end of the month’s 3rd day, Tenant shall pay a $X late fee plus $Y for each additional day that payment is late.
3. If Tenant’s personal check is returned or dishonored, Tenant shall pay $X for servicing of the bad check plus any applicable late fees, and all future payments shall be made by money order or cashier’s check.
4. Tenant shall pay a security deposit of $X prior to moving into the property, and Landlord shall hold this deposit in trust during the lease term. Interest shall not accrue on the deposit while it is in the Landlord’s trust. No more than X days following Tenant’s vacating of the property, Landlord shall return to Tenant the deposit less any charges for damages or cleaning of the property.
5. No person(s) other than Tenant and ___________________________ shall occupy the property for more than X consecutive days without the Landlord’s written permission. Additional rent may be charged for such occupancy.
6. Tenant hereby acknowledges receipt of the property in good condition, with any exceptions noted on the attached Move-In Inspection form. Tenant agrees to leave the property in the same condition in which it was received or pay the Landlord’s costs of restoring the property to that condition.
Tenant’s signature, date
Landlord’s address, city, state, ZIP code
(Printable Contracts, 2012)
Blum, B. (2010). Contracts: Examples & explanations (5th ed.). New York: Aspen Publishers.
Printable Contracts. (2012). Rental contract for real property. Retrieved from http://www.printablecontracts.com/Rental_Contract_For_%20Real_Property.php