Answers to the most common questions we are asked about contracts, including rights of rescission.
Don’t I have three days to rescind a contract to buy a car or home?
Even though these are probably the two most expensive items consumers purchase, the simple answer is “no,” unless the written contract expressly gives the customer that right. In the case of a car, once the buyer has taken delivery of the car or received the financing paperwork, there is no statutory right to rescind. In the case of a home, once the contract is signed by both parties, there is no right to rescind unless one side or the other cannot perform its obligations under the contract. Typical examples are a seller being unable to convey good title or a buyer being unable to obtain financing, but the contract may limit the ability to rescind or require forfeiture of a deposit. Dependent on the contract form used, the defaulting party could be sued for specific performance of the contract.
Florida does have a 3 day right to rescind a fitness club contract. Additionally, there may be equitable grounds to justify rescission of a contract, such as fraud or negligent misrepresentation. However, signing a contract in the belief that you have 3 days to think it over may cause more than “buyer’s remorse.”
I’ve bought a home and discovered problems. What are my rights?
In Florida, a seller of a residence is obligated to disclose all known defects that materially affect the value of the property that are not readily observable. That means three things: 1) the seller has to know about the defect, which can include knowledge that there is a condition that needs further investigation; 2) the cost to repair the defect is substantial; and 3) the defect must be something that is concealed and not obvious to the buyer. If all three conditions are met, you may have a case, even if you bought the house several years ago, although the longer you have lived in the house, the greater the likelihood that the seller will claim that the defective condition came into existence after your purchase.
Dependent on the contract language, a buyer may have a right to rescind (undo) the contract or alternatively sue for damages, either the cost to repair the defect or the difference in value of the house with and without the defect.
Does a contract have to be in writing to be enforceable?
Not always. Certain contracts are required to be in writing to be enforceable, such as contracts for the sale of real estate, leases for a term longer than one year from the date of execution, noncompetition agreements, and guaranty agreements, but many other types of enforceable agreements may be verbal. The problem with enforcing a verbal agreement is the difficulty in trying to prove what someone said as compared to what was written down and signed by all parties. That is why a written contract is preferred, but not always essential.
Can a contract be modified without my approval?
No. Often, companies will put in contracts, including online terms of agreement, that they may modify the contract without your approval. However, all that that language does is give the company the ability to change the terms – it does not mean that you are bound to those terms. You have a right to terminate the existing contract. If you continue to do business with the company after you have been notified of the change of terms, you will be considered to have agreed to the changes. That is why you should always review any document that claims to change your rights under an agreement promptly and carefully.
Does your firm handle contract cases on contingency?
Unlike personal injury cases that are typically handled on a contingent fee basis, the firm does not usually handle contract cases on contingency. The reason lies in the difference between these types of cases. Personal injury cases are often settled in pre-suit negotiations with insurance adjusters, without a substantial expenditure of attorney time. Also, if a case with a large damage claim goes to trial, it is usually because there is a sizeable insurance policy to go after. If the plaintiff wins, collection is virtually assured.
In a commercial case, the defendant is usually at risk of paying any judgment out of its own pocket, and will often fight very hard to avoid liability. Settlements come, if at all, usually after a case has been litigated thoroughly and about to be set for trial. Even if the plaintiff prevails after a difficult trial, there is the possibility that the defendant will be judgment-proof.