Terminating a Purchase and Sale Agreement

The proper way to terminate a Purchase and Sale Agreement is with Form 50 and a corresponding Form 90 that reflects the reason for the termination.  If terminating using a Form 35R, a 90 series Form is not necessary.

The use of Form 50 reserves the rights and claims by both the Seller and the Buyer within the Purchase and Sale Agreement.  This may be important for instance if, during the Inspection, something is damaged.  By the use of Form 50, the Seller retains the right to seek damages from the Buyer.

Form 51 is a rescission of the Purchase and Sale Agreement and takes both parties to their original positions before the documents were executed.  This means that both parties agree that they have never entered into the Purchase Agreement and nothing within the corresponding documents will bind either party.  In this scenario, the Seller may not have the right to seek damages from the Buyer.

Agents may argue that paragraph #3 on Form 51 protects their commission in the future.  In fact, paragraph #4 of Form 1A, the Exclusive Sale and Listing Agreement has much stronger language that does the same thing.

Agent

Steven Meyers, Owner/Managing Broker

Steven Meyers, Owner/Managing Broker

Phone(206) 972-3328