Posted on Friday, April 24th, 2020

mistake in real estate contractsNishad Khan is the attorney of choice among Orlando real estate attorneys who handle residential real estate transactions on behalf of both buyers and sellers. Orlando real estate attorneys are constantly faced with real estate transactions that become contested as a result of misunderstandings of the contract of sale.

The following are the main aspects of a real estate contract that are commonly misunderstood, misinterpreted and misread by both buyers and sellers which lead to frequent disagreements.

Automatic waivers

Contracts contain provisions that assign the parties certain responsibilities to perform which, if they do not perform them by certain dates and times, they waive certain rights. For example, if the buyer does not perform a home inspection by a certain date, they waive their right to conduct one.

Most real estate contracts contain these “automatic waivers“ of rights. Frequently, the parties agree that automatic waivers will not apply but, in the event those provisions are not stricken, the parties essentially agree that once a deadline comes and goes the parties are “married to“ those provisions.

Because real estate transactions happen so quickly, it is common that the parties “gloss over“ such provisions. However, when the deadline comes and goes and no action has been taken, one party will sometimes attempt to enforce their rights, leading to discord – to say the least.


Following suit with the above, deadlines in contract are important. However, some deadlines are “on or about“ and some are “on or before“. It is important to read your contract and see what the language actually says. The reason for this is that if you are obligated to perform “on or before“ that means the deadline is strict. “On or about“ is a more lenient deadline.

Contracts are all about language and this example really illustrates how not reading the contents of the contract can lead to serious misunderstandings.

Rights and remedies

Many real estate contracts contain provisions stating that the parties will agree to arbitration if they have a dispute. Litigation is always an option, of course, but if the parties waive those rights and decide to allow arbitration to decide any dispute, they are bound by that agreement.

This is one example of how the rights and remedies of the parties can be modified within the four corners of the contract. It is important that the parties read the actual contract before signing it since they may be waving their right to litigate important matters should disagreements arise.

Forfeiture of escrow

One of the most common misnomers when it comes to real estate transactions is that the buyer will simply forfeit their right to the escrow if they don’t close on the house or do not obtain a mortgage commitment.

Countless sellers believe this to be the case but it is simply not true. The buyer has to exemplify bad faith in order to be held to such a strict standard. Buyers themselves also believe they will simply forfeit their escrow if the sale does not go through. Again, this is simply not the case.

Every case turns on it’s own facts and if the buyer shows good faith and diligence or is denied the mortgage for legitimate reasons, they will not be forced to forfeit their escrow. Although sellers may wish this to be the case, it is not the way the contracts are written.

The parties are encouraged to seriously read what the contract says because forfeiting thousands of dollars to a seller is not the spirit of a real estate contract. The idea is that the seller wants to sell and the buyer wants to buy and the only way a buyer typically forfeits the deposit is if they show bad faith.

Orlando real estate attorneys such as Nishad Khan encounter countless Real estate transactions where the parties have simple misunderstandings due to the fact that they do not read the contract of sale or read it and completely misunderstand it.

The above are only four of the many misunderstandings that arise on a day by day basis in residential real estate transactions.

Toward that end, it is important that you consult with an experienced real estate attorney such as Nishad Khan If you are considering buying or selling a home in Orlando, FL so that your rights and remedies may be explained to you in a professional and courteous manner before you sign any binding contract of sale.