Contracts are part of doing business, whether you are an individual or a corporation in Chicago or elsewhere. Although it is always a good idea to put any agreement in writing, oral contracts are enforceable under Illinois law if there is enough evidence to support that a deal was made. However, there are exceptions, which are covered by the statue of fraud
The Chicago Tribune explains that the statute does not apply to real estate contracts. The three elements that are needed to make a contract legally binding are an offer, an acceptance and consideration. The process begins with the buyer making an offer. Most courts agree that merely advertising a house for sale at a set price does not make it an offer. Instead, it is asking others to make an offer.
Once a buyer makes an offer, the seller has three choices. If the seller accepts, it is indeed a contract. The seller can also reject the proposal outright or make a counteroffer, neither of which makes the negotiation a contract. When a seller counters an offer, it is viewed as an interest in pursuing a deal, but the terms are not agreeable. Once a counter is made, the buyer then has the same choices to make.
When terms have been agreed on and accepted, there is a contract, but the offer and acceptance of it must be in writing. Fax and email copies of the agreement are acceptable as proof, but it is a good idea to follow up with a written document that has a valid signature.
Consideration is another factor to be weighed in determining the validity of a contract. Usually, this is money that the buyer gives in good faith, or with the intention to follow through. Even if the offer does not include money, consideration applies if the seller takes the house off the market and the buyer stops house-hunting. Consideration is “something of value,” and in this instance, both sides have clearly acted with intent.
It bears repeating: Get it in writing if you want to be sure of something. People change their minds all the time, and a written document is your only real proof that a contract is valid.
The information in this article is general in nature and should not replace legal counsel.