Issues of Contract Validity & Enforceability

With extensive corporate law experience, attorney James R. Olsen of Orem, Utah, works in the states of Utah and Arizona. James R. “Jim” Olsen’s areas of interest include the negotiation of contracts as well as their formation and administration.

Two foundational questions posed in contract law are:

1. Is the contract valid and enforceable?

2. What remedies are available if the contract is broken by one party?

While the validity of a contract would seem to be a prerequisite to its being signed, the fact is that many contracts are not set down in writing and, even if they are, they have not been agreed upon in the presence of and with the assistance of an attorney.

These issues can make the “manifestation of mutual assent” represented by a contract invalid and unenforceable. One party may later claim to have understood an offer as being different from what was agreed upon. Alternatively, the contracted party may have assented to an offer that was understood to be in jest and thus not legally binding.

Another important concept is “consideration,” or the determination of whether the promisee delivered an agreed-upon service or product to the promisor as stipulated in the contract. Because of the many layers of complexity, including whether the promisor reasonably could have been expected to fulfill the promise, working with an experienced attorney is important.

Deed in Lieu of Foreclosure - An Alternative

Currently managing restaurants in Orem, Utah, James R. “Jim” Olsen led his own law practice in Arizona. As an attorney, James R. Olsen provided many real estate services, such as deeds in lieu of foreclosure, which are considered a last resort for cash-strapped homeowners who face foreclosure.

A deed in lieu of foreclosure erases the homeowner’s debt by transferring the title to a bank or another institution. It has several benefits, among them saving the high court costs of a foreclosure and avoiding public embarrassment to the seller. The arrangement also gives the departing householder time to find new accommodations.

This is not the only way of avoiding foreclosure. Another method is loan modification, in which the terms of the lending agreement are renegotiated. An alternative tool is a short sale, which is finding a buyer who will pay less than the remaining value on the mortgage. Drawbacks for loan modifications are the necessity of third parties to make a deal and, for short sales, loan extensive paperwork.

Deeds in lieu of foreclosure do carry certain risks. There is the chance that the value of the property could fall short of the loan balance. Moreover, junior creditors may have claims on the property.