When does a contract become binding

8 posts in this topic

Hallo again,

 

This post is a semi follow-on from Schrebergarten purchase using a Genehmigungserklärung.

After a year of messing around plus Covid interruptions, we are finally at the point of signing the contract.

My friend, who was going to make the purchase from my ex on my behalf (see old post but tl;dr) lost his job and pulled out. I then went ahead as the purchaser.

 

The sequence of events - as insisted upon my his lawyer - will go as follows:

1. The seller (my ex) will sign his half of the contract through a representative.

2. I will send the €35,000 to the Notar.

3. I will then attend at the Notar's office in person and sign my half.

4. The sale will be registered in the Grundbuch.

 

My question: does the contract become legally binding (on us both) as soon as the seller has signed his half?

If not then, when?

 

The reason I am asking is that my ex owes me €5,000. This is not in doubt; there are emails and letters acknowledging the debt. However, I am 1,000% certain he has no intention of paying it, and paying a lawyer to sue him makes no sense. I am therefore thinking about transferring €30,000 - ie. the purchase price less the €5,000, to the Notar, and then arguing the toss.

 

However, I do not want to jeopardise my purchase of his half of the Schrebergarten. It's been a very long, hard haul to get to this point.

 

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To simplify a complicated mess.  An item is offered offered for purchase at X amount.  The buyer agrees to the amount.  That, in and of itself, is numerous locations a binding contract.  When it is documented and signed, it holds more weight since it is on paper, dated and signed by the involved parties.  The terms of the contract can come into play, for example if illegal terms are written into the contract.

Contract law can be complicated, scary and worrisome.  I am not a lawyer, but was a government investigator working contract law and contract fraud.  Take these comments as you will.

Agreeing to and signing a contract for 35000 Euros, makes the buyer obligated for that amount, short of any additional, legal and binding terms in the contract.  Interest or closing costs, for example.

In your example above, you verbally agreed to the terms and contract. It is therefore binding. Signing it does add weight.  In Germany, a verbal contract is viewed as binding, but for the purchase of a house, written is better in the event the matter need be brought before the German courts.  If the seller signs the written contract and the buyer does not, it is still a binding contract based upon the oral agreement. 

On the matter of the 5000.  One has nothing to do with the other, unless that shorted 5000 is written into the terms of the house purchase.  The 5000 and 35000 are two unique sets of 'business'.  The owed 5000 has nothing to do with the purchasing of the home.  If you have this 5000 Euros owed to you somehow documented, I would suggest showing this to the seller's attorney or explaining it when there is no documented evidence and ascertain if the contract for the house can be changed to lower the 35000 to 30000.  But to hold payment back due to this could place you in breach of the contract and chances are the seller stands a good chance win before the courts.

You should have negotiated the matter of the 5000 at the beginning when you were in initial talks about the home.  Unless you can have the seller's lawyer involved to change the contract, it may be too late.
 

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17 hours ago, MaineCoon said:

However, I do not want to jeopardise my purchase of his half of the Schrebergarten. It's been a very long, hard haul to get to this point.

 

 

If this is your goal then either keep the debt and the purchase totally separate, or get the Notar to include this stipulation regarding the debt directly into the contract of sale.

If you fuck about and try to change the terms of the deal then the notar can and will void the whole sale, and you will still be on the hook to pay their fees etc.

(Source I had a property purchase fall through completely because of a dispute over some minor details which were not in the contract).

 

 

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16 hours ago, BayrischDude said:

An item is offered offered for purchase at X amount.  The buyer agrees to the amount.  That, in and of itself, is numerous locations a binding contract.

 

I was walking down the street and noticed a "for sale" sign in front of a house.  A man came out, said he was the owner.  I asked how much he wanted and he told me a price.  I said, "I'd buy the house for that much money" and kept walking.  The buyer yelled out after me and said, "I agree".

Using your definition, looks like I'll have to buy the house.

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21 minutes ago, catjones said:

 

I was walking down the street and noticed a "for sale" sign in front of a house.  A man came out, said he was the owner.  I asked how much he wanted and he told me a price.  I said, "I'd buy the house for that much money" and kept walking.  The buyer yelled out after me and said, "I agree".

Using your definition, looks like I'll have to buy the house.

Ah- but you said " I WOULD buy the house".  not "I WILL buy the house"!

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20 hours ago, BayrischDude said:

In your example above, you verbally agreed to the terms and contract. It is therefore binding

No, not at all. Not even if you had it in writing. Under German law real estate transactions will only be binding if done involving a notary (with few exceptions like e.g. foreclosures).

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On 27.5.2022, 19:55:04, MaineCoon said:

I am 1,000% certain he has no intention of paying it, and paying a lawyer to sue him makes no sense

You could send him a "Mahnbescheid" (there is already a thread about it). If he doesn´t object to it you´ll get a court order allowing you to send a bailiff to him. If he objects, and he loses in court, he´ll have to pay your lawyer, too.

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@BayrischDude, @pappnaseThank you very much. On the basis of what you've both said - which agrees with what I already thought but did not want to believe - I shall transfer the €35,000 to the Notar.  *Then* I will write to the seller's lawyer and ask when he plans to repay me the €5,000.  I definitely don't want to jeopardise the sale in any way.

With luck, he will choose to deduct the €5,000 from the €35,000; without luck, I will have to go the small claims court route. Fortunately this is a no-brainer, as the €5,000 is well-documented.

 

@Jeba: as it happens, the small claims route was going to be my next question. I've tracked down a few old threads on how to go about it. One of them mentioned that it would be a good idea to get a lawyer to look at my claim before submitting it, and I think that is a very good idea. I'd rather spend €150-200 than find myself with a failed suit and a pile of court costs.

BUT I don't have a lawyer. I contacted a few in my area, and was basically turned down "Very sorry, much too busy..."

I got the feeling they didn't want to know because there wouldn't be much money in it for them.

So: does anyone have a recommendation?

 

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