What are the implications on a contract when the buyers agent delivered the option fee a day late?

We have discussed this with our selling agent and she is on top of it but I am looking for responses with those have experienced this before. Just so I know what to expect. I believe our agent has us on the right path with the issue I just want to make sure. We believe the buyer, in earnest, delivered to her agent on time but the agent failed to deliver to us or our agent on time. I do not want this to go sideways because her agent didn't fulfill the role.

The timing window is pretty ****ing ridiculous now. Stupid law.

I didn't think it was a big deal and according to our agent it isn't. I just had a hard time following our phone conversation about the implications. So really not a big deal.

Theoretically, you could tell them they have no option period and that their earnest money is at risk if they try to back out or ask for repairs. You would likely get pushback though.

I think that;s what I want to avoid is pushing back but may just sit on it to see what the buyer says after the inspection that was completed today.

Diggity said:

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The contract is pretty clear that if they don't deliver by the deadline, they have no option period. I would suggest that if you were going to enforce that provision, you let them know right off.

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Couldn't agree more with this statement.

Stacy and Digs this sounds new, to me anyway. Has there been any court cases backing this contract wording?

Just seems to me it would be hard to enforce for one day late. A common sense judge and/jury would just throw it out. Especially with no buyers agreement which leads to a very grey fiduciary responsibility for the buyer agent and client.

SteveBott said:

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Stacy and Digs this sounds new, to me anyway. Has there been any court cases backing this contract wording?

Just seems to me it would be hard to enforce for one day late. A common sense judge and/jury would just throw it out. Especially with no buyers agreement which leads to a very grey fiduciary responsibility for the buyer agent and client.

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I'd have to research cases, but if the agent "acted" as a buyers agent it's my understanding the courts have supported the implied agency and held agents accountable to the fiduciary duty without a signed agreement. We had several discussions in the risk management committee and option check delivery is a very hot topic....it's not something to play with.

IIRC it was an area of emphasis once the option period deadline changed to 5pm.

I see the liability of the buyer agreement. Since agents have E&O insurance there is a pot of money available. Lot easier to sue and win against a professional with money. If I was the seller that is where I'd go.

Some poor non/realty family of four that is first or second time in the market getting screwed by the courts is a different matter. And without the buyers agreement technically the agent works for the seller. At least that was how it was explained to me long ago.

SteveBott said:

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And without the buyers agreement technically the agent works for the seller. At least that was how it was explained to me long ago.

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You're correct here, but there has been an understanding of "implied agency"...it's left to interpretation and is viewed and determined on a case by case basis. My understanding is that if the agent acts as a buyers agent and no IABS has been presented and signed, then the agent would be held to the standard as a buyers agent. The buyer would not be bound to said agent.

In OP's original post...if the option fee was not delivered in time, then the buyer has no option period.

Insert obligatory statement "I'm not an attorney, nor am I giving legal advice...if you have questions you should consult an attorney".

My personal opinion is that sitting on that info and using it as a negotiating tool when/if a repair addendum is submitted is, at the very least, a very bad plan.

Well in your scenario with no agreement the buyer should go after the agent with this 'implied agency' after looosing my money.

Actually I'd go after everyone. If court was the only way of course. Courts suck

SteveBott said:

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Well in your scenario with no agreement the buyer should go after the agent with this 'implied agency' after looosing my money.

Actually I'd go after everyone. If court was the only way of course. Courts suck

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Agreed.

The attorney's advice is always the same....sue everybody.

The wording is very clear cut and "time is of the essence" is bolded at the bottom of the clause.

Now whether or not a seller would take a case to court over this, I don't know, but they would have a very strong case if they really wanted to push it.

At the end of the day, the liquidated damages should be limited to the earnest money so I don't think the juice would be worth the squeeze in most cases.

Digs is this new wording on TREC contacts? How new?

You guys change contract language like I change toilet roles lately.

If new has it been challenged in court? You know someone will.

I don't really understand what you're asking, OP. It's your contract. Do what you want. If you want to enforce it to the letter, blow up your own deal, and probably cause a major headache for yourself...then go right ahead. If you want to keep your deal intact and you otherwise have no concerns, then just let it go. It doesn't matter that it was a day late if you don't want it to matter.

I think I posted that in my first post. Good
News we agree and of coarse, right!

Some of us in the bidness went down a rabbit hole. I'm still digging

Spoony Love said:

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I didn't think it was a big deal and according to our agent it isn't. I just had a hard time following our phone conversation about the implications. So really not a big deal.

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There are no implications if you don't want there to be implications. Just let it go if you want the sale to proceed.

It was a couple years ago. Most were happy that it ended the option period at 5p rather than 11:59p.

Quote:

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23. TERMINATION OPTION: For nominal consideration, the receipt of which is hereby acknowledged by Seller, and Buyer's agreement to pay Seller $______ (Option Fee) within 3 days after the effective date of this contract, Seller grants Buyer the unrestricted right to terminate this contract by giving notice of termination to Seller within ___ days after the effective date of this contract (Option Period). Notices under this paragraph must be given by 5:00 p.m. (local time where the Property is located) by the date specified. If no dollar amount is stated as the Option Fee or if Buyer fails to pay the Option Fee to Seller within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract. If Buyer gives notice of termination within the time prescribed, the Option Fee will not be refunded; however, any earnest money will be refunded to Buyer. The Option Fee will will not be credited to the Sales Price at closing. Time is of the essence for this paragraph and strict compliance with the time for performance is required.

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