A Real Estate Purchase Agreement governs the sale and transfer of property ownership between buyer and seller. This playbook covers due diligence, contingencies, and closing mechanics.
Why This Matters: Ambiguous dispute mechanisms can prolong conflicts and increase costs. Clear procedures expedite resolutions and reduce legal uncertainty.
Negotiation strategy
If you're the Buyer:
Ensure mediation and arbitration steps are clearly outlined before litigation. Verify governing law is a preferred jurisdiction, and venue is specified.
If you're the Seller:
Negotiate for a jurisdiction that aligns with your business preferences. Consider cost-shifting provisions to mitigate legal expenses.
Essential elements
1
Mediation Process
Initial step before litigation.
2
Arbitration Rules
Binding resolution method.
3
Governing Law
Applicable legal framework.
Action framework
ACCEPT
Propose edits if the jurisdiction is unfamiliar or unfavorable.
EDIT
Reject if the clause lacks mediation or arbitration steps.
ADD
Add cost-shifting provisions to cover attorneys' fees.
PRO TIP
Select a jurisdiction with predictable legal outcomes to minimize risks.
Example clauses
FAVORABLE
Preferred Mediation and Arbitration Clause
"Before any party may initiate litigation, the parties agree to first attempt to resolve any dispute, controversy, or claim arising out of or relating to this Agreement through mediation. If the dispute is not resolved through mediation within 30 days of a written request for mediation, the parties agree to submit the dispute to binding arbitration."
NEUTRAL
Standard Choice of Law Clause
"This Agreement shall be governed by and construed in accordance with the laws of the State of [Insert State], without regard to its conflict of law principles."
UNFAVORABLE
Missing Venue Specification
"Any legal action or proceeding arising out of or relating to this Agreement shall be brought in a court of competent jurisdiction."
Fallbacks
High-Risk Projects
For high-risk projects, ensure dispute resolution clauses are robust to handle potential complexities.
International Contracts
Consider international arbitration rules and select a neutral governing law to manage cross-border disputes.
Small-Scale Agreements
Simplify dispute resolution clauses to reduce legal costs for smaller agreements.
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WEEK 3
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WEEK 4
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