Longhorn Diaries - Diary Five
Condition vs. Term
During the Home buying and or the Home selling process you’ll often hear your professional realtor mention “this offer is CONDlTIONAL” or “this is a requested TERM that the buyer offered us”... without a proper explanation, these two variables in an offer or listing agreement may leave you feeling clueless.
Here is the long and short of it:
Definition of a condition - Many contracts contain conditions. The contract conditions determine the parties' obligations. A condition is an act or event that affects a party's contractual duty. A condition is a qualification that is placed on an obligation.
So basically, if a condition is not fulfilled it will destroy a contract.
Here is the best example of a condition - Buyer securing new financing.
Definition of a term - A contractual term is "Any provision forming part of a contract". Each term gives rise to a contractual obligation, breach of which can give rise to litigation. Not all terms are stated expressly and some terms carry less legal gravity as they are peripheral to the objectives of the contract.
To simplify, a term is something that must be fulfilled or carried out or else the two parties (buyer and seller) may pursue all remedies on each other...Super fun and typically lawyers get involved at this point.
Here is the best example of a term - install a railing on deck by a professional in order to meet municipal code and compliance.
View the #longhorndiaries video for a further explanation on this topic.