jump to navigation

Terminating a Contract November 29, 2005

(This is a guest post by Craig Blackmon, an attorney in Seattle whose practice focuses on residential real estate — see www.lawofficeofcraigblackmon for more information. Please note that this post is not legal advice. You should consult an attorney for specific legal counsel.)

Last week, the Washington Appellate Court decided a case dealing with a buyer’s termination of a purchase and sale agreement. The case will not be published, and accordingly it has no precedential value for similar cases in the future. Nonetheless, the case does provide some interesting insight on the factors a buyer should consider before walking away from a purchase and sale agreement.

In Silvers v. Lee, the seller (Ms. Silver) and the buyers (Mr. and Mrs. Lee) entered into a standard MLS form purchase and sale agreement (the “PSA”). The buyers inspected the property, and after the inspection asked the seller to install electrical outlets in the garage. The seller agreed to do so. The seller had the work performed by a friend, a licensed electrician. Although the work was subsequently found to have been performed to code requirements, the electrician did not get a permit for the work, as required by law. The PSA required any work done by the seller to be performed in a “commercially reasonable manner.” In addition, pursuant to the PSA, the buyers had the right to reinspect and approve the completed work prior to closing.

The buyers decided to forgo the reinspection. Instead, they asked the seller to provide them with a receipt for the work. Because it had been done by a friend, the seller did not provide a receipt. Absent a receipt, the buyers terminated the contract. In their notice of termination, the buyers indicated that they were unconvinced that the work had been done properly as required by the PSA. Both parties claimed the earnest money, and a lawsuit followed shortly thereafter.

As the lawsuit developed, the buyers learned of the seller’s failure to obtain a permit for the work. Thus, the buyers alleged that the work could not have been done in a “commercially reasonable manner,” and accordingly they had a legal excuse for terminating the contract.

The Court disagreed. The Court noted that every contract imposes on the parties an implied duty of good faith and fair dealing. This duty requires a party to know of the legal excuse for canceling the contract at the time of the cancellation. The party cannot use after acquired knowledge as the cancellation’s basis. The Court also noted that, in interpreting any contract, it is a court’s responsibility to determine the parties’ intent. Here, based on the PSA, the parties clearly intended for the buyers to reinspect and approve the work prior to closing. This was the agreed method for approval or disapproval of the work at issue. Accordingly, the buyers’ post-termination discovery of the illegally performed electrical work did not provide the buyers with a legal excuse for terminating the contract.

The Court also noted that, as a general rule, one party may terminate a contract only if the other party has committed a “material breach” of the contract. A “material breach” occurs when the breach constitutes a “substantial or total failure” of the breaching party to live up to the party’s contractual obligations. Under the circumstances of this case, the seller’s failure to provide a receipt was not a material breach and therefore the buyers did not have the right to terminate the contract.

Finally, the Court commented on the fact that the PSA did not impose a duty on the seller to provide a receipt for the work at issue. Arguably, the implied duty of good faith and fair dealing required the seller to respond to a reasonable request from the buyers relating to whether the work was performed in a commercially reasonable manner. However, the buyers never informed the seller why they wanted the receipt until they indicated in the notice of termination. Absent such explanation for the request, the seller did not have a contractual duty to provide the receipt.

The case illustrates several factors that should be considered where a party is contemplating the termination of a purchase and sale agreement (other than where the contract clearly gives the party the right to do so, such as where a contingency is not satisfied). First, any termination must be based on knowledge known at that time. A party cannot rely on the subsequent discovery of additional information after the fact that would otherwise justify the termination. Second, the party should ensure that the other party has indeed committed a “material breach” of the contract. Absent a material breach, there may be no legal justification for terminating the contract. Third, where the termination is based on the seller’s failure to provide requested information, the buyer should ensure that the request for information was explained to the seller, including the specific basis for the request. The basis should be directly related to a contractual duty imposed on the seller by the PSA (in the case above, the request related to the seller’s duty to perform the work in a commercially reasonable manner).

The case provides one other lesson as well. Pursuant to the terms of the PSA, the prevailing party in any lawsuit was entitled to an award of attorney’s fees and costs. Thus, in addition to the $10,000, Ms. Silvers also will receive thousands of dollars from the Lees to compensate her for her expenses through trial and appeal. In other words, in their unsuccessful attempt to recover $10,000, the Lees spent much, much more.

Sphere: Related Content

Major Upgrade Completed November 27, 2005

I’ve wanted to make some improvements to the layout of Rain City Guide for quite some time, and I finally found some time this weekend to get the changes made and tested.

For those who are curious, here is what I did…

I took a wonderful wordpress theme and started hacking at it in the following ways:

I also made some more changes to the backend of the system, such as:

Of all the changes, the one that I like best is the new “worth noting” feature. You might have noticed that a couple of weeks ago I started posting a set of links with a tiny bit of commentary (They always had the title “links for 2005-11-xy”). I REALLY enjoyed putting these collection of links together because it took almost no effort and yet it let me cover a whole lot of ground. However, the feedback that I got from these posts was that they looked ugly and showed that it took no effort to post! :) Hence, I’ve been looking for a better way to display this links… and I’m hoping that the “worth noting” column is the answer.

The links from the Worth Noting column will not show up on the main feed from this site, so if you tend to read Rain City Guide using a feed reader (YEAH!), I also recommend subscribing to my “worth noting” feed. Not sure what a feed reader is? Here’s some background.

And one more last thing about the “worth noting” column that I think is worth noting… I’ve set it up to be a true community-based resource. If you want to post an item with a little bit of commentary to the “worth noting” column, all you have to do is to tag an item using del.icio.us with the phrase “raincityguide”. The link won’t immediately show up because I cache the feed for about an hour, but I assure you that the link and commentary that you write will show up on the site sooner than later. Now, I realize that this method has the potential to be abused, but I think that the readers of rain city guide are generally considerate people, so I’m not too worried. As a matter of fact, I look forward to seeing what links you bring to my attention!

(If you are wondering if this is the RSS announcement I was planning to make, it’s not! There’s still more to come!)

Of course not everything can go too smoothly… There are two issues that escaped my testing that are yet to be resolved:

  1. The search form does not work when searching from within a post (it works from the main page!)

  2. The site simply won’t load using internet explorer on a mac (I get an error that says “Handler could not be removed” which means nothing to me yet!)

Neither of these issues seems like a show stopper, so I’m not going to role back to the old layout… Can you find any other bugs with the new site? I’d definitely like to know.

Now that I’ve given my opinion on the good and the bad of the new layout, I’d be curious to hear what you think!

UPDATE: Solved the search issue thanks to some help on this wonderfully active post for the Regulus theme.

However, since then I’ve also found out that my footer needs some work… So much to do and so little time!

Sphere: Related Content

Is Santa Planning on Moving to Seattle? November 26, 2005

I don’t mean to brag, but I was just checking my log files and I noticed that someone from the North Pole found my site while searching for real estate on Google.

I imagine the street level up there is pretty high this time of year. I wonder if one of the elves is thinking of getting out of manufacturing and into a more high-tech job?

santa moving to seattle

Also, if you look closely, you’ll notice that my North Pole visitor had cookies enabled :)

Sphere: Related Content

Real Simple Syndication (RSS) for Real Estate

Duck Flapping WingsI can tell from some of the questions I got from my past post about RSS feeds that I was going over some people’s heads. As the resident geek here at Rain City Guide, I feel it is my responsibility to explain RSS feeds and why they are so cool… So let’s begin with the big picture…

Who cares about RSS?
Imagine that you could create a newspaper that only included content that you were interested in. Mine definitely would not include tables if yesterday’s stock quotes! But what would it include? My ideal newspaper would be completely personalized to my interests and include this type of information:

But wait! I’ve already got that newspaper and it is delivered (digitally) to one place every day. Even better, it is delivered continuously throughout the day as new articles appear. My newspaper is ALWAYS up-to-date. It includes selected articles from the New York Times, the Seattle Times, the Seattle PI and 4500 other newspapers!. As a matter of fact, I’ve created such an awesome newspaper that I rarely search the web anymore for new content. Just about all the content that I could possible be interested in gets delivered to me! And best of all, this newspaper with articles, commentary, data and photos personalized to my tastes is delivered to me FREE!

How does this work?
Through the magic of RSS.

What is RSS?
RSS stands for Real Simple Syndication. The idea behind RSS is that a website (newspaper, blog, photo site, etc) publishes a text file on their site with a very specific (RSS) format so that other sites can “ping” this one text file to find the latest news, information, photos (or home listings!). The text file is pretty ugly to look at (here is Rain City Guide’s RSS feed), but that is beside the point, because users should never be looking at a raw RSS feed. Instead, users (that means you!) should get a feed reader that will parse all the ugly text and reformat it in a nice, easy-to-read package.

Have a lost you yet?
Stick with me, and I hopefully you’ll start to see what makes RSS feeds so cool (at least in a geeky sort of way!).

Ducks at LakeWhy go through all the hassle to get a site’s RSS feed when you can just go to the site whenever you’re interested in reading their content?
The beauty of the RSS feed is that updated information is brought to you! Ever since I’ve started using a feed reader, I find myself searching the web for interesting information a lot less because interesting information is brought to me! To give you an idea of the diversity of feeds available, here are some of the things that are delivered to the inbox of my feed reader every time new information is published:

I mention these items just to give you a picture of the diversity of feeds that are available. In reality, over 100 of my feeds are all from bloggers, but the options for different feeds are massive and growing every day. I’ve really enjoyed being able to read articles and see photos from all of these sources within one place (a feed reader!), which brings me to…

So where do I get one of these feed readers so that I can create my own on-line newspaper?
There are a ton of feed readers available. Some of them are desktop-based and some are web-based. Most of my experience has been on the following three web-based options, so I’m going to limit my opinion to these three, but feel free to search beyond my experience:

I began using MyYahoo years ago, and then a while back (months? years?) they added the ability to add any RSS feed to a user’s MyYahoo page. I took advantage of this and enjoyed it so much that MyYahoo page became extremely cluttered. I clearly needed a better option which is when I turned to Bloglines. Bloglines allows you to categorize your feeds into an unlimited number of folders and it does a great job of keeping track of which articles you’ve already read, making it extremely popular and easy-to-use program. Plus it is 100% web-based so that if you log into the service and read an article on one computer (let’s say at work) then when you log in from home, your home computer will know that you’ve already read that article… Bloglines is a great way to keep up on your favorite news, blogs, etc.

Ducks PlayingI’ve also been playing around with Google’s new feed reader called GoogleReader. It’s a great option as well and I really like that it has an “relevance” option that brings the things I’m most likely to be interested in to the top of my list of things to read.

What’s next?
My hope is that if you’re new to RSS feeds, then at least you are starting to see that they have a ton of potential. They are everywhere and Scobleizer (over at Microsoft) would even argue that they are essential for new web companies! Feeds are only going to become more popular, so if you want to be a web-savvy individual, it is time to hop on the band wagon and try it out!

And if you’ve made it this far, you’ll start to notice orange XML Button or RSS “badges” all over the web. These badges are letting you know that you can read this site’s content from your blog reader.

For simplicity’s sake, I’m going to assume you are using GoogleReader… To add Rain City Guide to GoogleReader, here is what you need to do:

  1. Go to GoogleReader
  2. In the search box, type is “Rain City Guide” and click “Search for New Content”.
  3. Where you see “Seattle’s Rain City Real Estate Guide”, click on the Subscribe button. This will add Rain City Guide’s RSS feed to your GoogleReader.

It is that simple to add a feed. In addition, most sites offer an “+ to XYZ” buttons like this one (Add to Google) from Google. There are bunch more feed readers on the market, and I’ve tried to make it as easy as possible to add Rain City Guide, so I’ve added a button for all the ones that I’m aware of on my sidepanel.

Also, if you are interested in real estate feeds, feel free to grab the real estate feeds that I follow by downloading this file to your hard-drive and using the “import” feature within GoogleReader to add these feeds. (To do this you will need to (1) click on “Your Subscriptions” and (2) on the pull down menu that says “more actions”, click on “import”. Then (3) just follow the instructions to import the XML file.)

So why all the big fuss about RSS feeds? And what does this have to do with real estate?
I’ve been playing around with some ideas I have for an RSS feed of real estate listings and before I announce anything, I needed to have a post I could turn to where I could say “This is what an RSS feed is and why you should care!” There’s nothing I’m ready to present yet, but if you’re interested in being an alpha-tester, let me know and I’ll pass along a link soon enough!

Sphere: Related Content

Real Estate Search Options (with an Emphasis on Feeds) November 23, 2005

View from a Houseboat in SeattleAs promissed a few weeks ago, I’ve been updating my list of real estate search technologies on a regular basis.

Thanks to your emails (along with a little curiosity on my part) , I’ve been able to add more sites in the list in the past few days. If you know of any other sites, definitely let me know!

One of the more interesting options I’ve seen is CityCrybs. I really like that they’re offering RSS feeds (a topic worthy of another post!), but seeing as how all of their listings are for the East Coast, I can’t really play around with the site much and understand if the results are any good. Can anyone from the East Coast share their opinion on this site?

Along these lines, would anyone in the Seattle area be interested in an RSS feed of homes as they get listed in the MLS? It really wouldn’t be very hard to put together, but I’m not sure who it would appeal to. In other words, for most people, getting a listing of every home that comes on the market would be overkill (even for a small geographic area) unless you just wanted to use the list to “keep up” on your neighborhood. But are there some specialized feeds that would appeal to people? The first example that comes to my mind would be for an investor who would be interested in finding about each home that has a low $/s.f. ratio? Maybe a feed of homes that have been on the market for over 60 days? Hmm… How about each houseboat that comes on the market?

Do you have another idea for a real estate listing feed? I’m definitely interested in hearing about it!

Sphere: Related Content

links for 2005-11-22 November 22, 2005

Sphere: Related Content

links for 2005-11-20 November 20, 2005

Sphere: Related Content

links for 2005-11-19 November 19, 2005

Sphere: Related Content

Senior Housing Boom or Bust? November 18, 2005

John Luther Genealogy PhotoI’m a few days behind in this post, but it seems worth noting that the Seattle Times had two stories this past weekend on the Senior Housing market that made me scratch my head…

Article #1, some feel squeeze from senior-housing boom, explains how the boom in senior-housing facilities is making it difficult to find a starter-home, while article #2, many seniors find few housing choices in area, explains how seniors are finding it difficult to find small, inexpensive (i.e. starter) homes.

Maybe the two authors need to get together and write one article that says (surprise, surprise) that finding an inexpensive starter home in Seattle can be difficult. :)

Sphere: Related Content

links for 2005-11-18

Sphere: Related Content

older posts »