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HOW TO STAY OUT OF TROUBLE IN A TROUBLED WORLD

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APPENDIX: Purchase Agreement - pg.9 | White Vs. Strange Case - pg. 18

Defining Trouble

1. Trouble as a Licenseea. Fees, fines, suspension of license

2. Trouble with liability to clients3. Trouble with the “deal”

a. Keeping buyers and sellers under contract through to Act of Sale4. Keeping your clients out of trouble

Relationship Between Real Estate Agents and Buyers/Sellers

1. Agent or Mandatary?a. Mandate is a contract by which a person, the principal, confers authority on another

person, the mandatary, to transact one or more affairs for the principal. La Civ Code art.2989

b. Real Estate Agentsi. A real estate “agent” as that term is used in real estate law, particularly the Louisiana

Licensing Law is a “licensee acting under the provisions of this Chapter in a real estatetransaction,” meaning someone licensed to conduct real estate activity in Louisiana. LaR.S. 37:1431

ii. For example, a agent in the case of a listing agreement, can be compared to anemployee. The agent accepts the “job of selling his “employer’s” (the owner’s)property, but the agent has no legal authority to bind the owner. His true “job” is to findeomeone to buy, not to act for the owner and actually transfer the property by signingthe act of sale.

2. Mandate (Power of Attorney)a. The contract of mandate is not required to be in any particular form. Nevertheless, when the

law prescribes a certain form for an act, a mandate authorizing the act must be in that form.La Civ Code art. 2993

b. Example: Power of attorney granting the mandatary the authority to transfer title to real estateis required to be in the same form as the act of sale authentic act

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Listing Agreements

Three types:

1. NonExclusive Listing Agreementa. Owner of real estate may place it in the hands of as many brokers as he sees fit, and several

brokers are employed. The one who produces a customer and is the “procuring cause” of thesale is entitled to the commission.

2. Exclusive Agencya. Precludes the owner from employing other brokers during the term of the listing agreement but

does not preclude the owner from selling the property himself.

3. Exclusive Right to Sell – Standard form used by Brokeragesa. Entitles the broker to commissions on all sales during the life of the contract including those

made by the owner regardless of the agent’s role as procuring cause, absent any exclusionsb. If the owner has been negotiating with prospective purchasers before engaging a broker, the

owner should specifically list those prospective purchasers as exclusions from the listingagreement that gives the broker exclusive right to sell.

Duty of Care

Every act whatever of man that causes damage to another obliges him by whose fault it happened torepair it. LA Civil Code art. 2315

Every person is responsible for the damage he occasions not merely by his act, but by his negligence, his imprudence, or his want of skill. LA Civil Code art. 2316

Example: Negligent Misrepresentation Buyers were aware of a prior termite infestation, but they were assured by the real estate agent that the rest of the house, other than the attic, which was indicated on the report, was structurally sound. It would be a question of fact as to whether the real estate agent had negligently misrepresented to buyer the amount of damage which had been caused to the home by termites.

Example: Buyer has the duty to inspect the property before the deadline. If the buyer misses the inspection deadline and later wants to back out of the contract due to a condition of the property that he should have ascertained, the agent might be in breach of the duty of care in making sure the buyer understands the terms of the purchase agreement.

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Detrimental Reliance

A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying. Recovery may be limited to the expenses incurred or the damages suffered as a result of the promisee's reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable. LA Civil Code art. 1967

Example: Inspections and Due Diligence – Agent hires inspector (for account of Buyer); agent deals exclusively with inspector; agent get inspection report and deals with repair issues; response to Seller,etc

Disclosures

1. Seller’s duty to disclosea. Seller of residential real property must furnish purchasers with a Property Disclosure

Document, which may be in the form promulgated by the LREC or another form that contains substantially the same information.

2. Buyer’s rights and Seller's consequences for failure to disclosea. If the property disclosure document is not delivered until after purchaser makes an offer,

purchaser can terminate any resulting real estate contract or withdraw the offer for up to 72 hours after receipt of the disclosure. This termination or withdrawal will always be without penalty to purchaser and any deposit must be promptly returned to purchaser (despite any agreement to the contrary)

3. Duties of Real Estate Licensees and Consequences for failure to fulfill dutiesa. Agents are not liable for error, inaccuracy, or omission in a disclosure, unless the agent has

actual knowledge of the error, inaccuracy, or omissionb. Agents are required by law to inform clients of their duties and rights in connection with

Property Disclosures

Purchase Agreement

1. Duty of licensee to use purchase agreement forms (LA R.S. 37:1449.1)a. No licensee shall alter the purchase agreement form; however, addendums or

amendments to the purchase agreement form may be utilized

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i. This prohibits handwriting and initialing outside of the blank spacesii. Initialing the provided lines at the bottom of each page is important to prevent a “slip

page.”

2. Writing an effective offera. Purchase agreements should be filled out completely, leaving no blanks (write N/A if

blanks do not apply)b. Purchase agreement must be signed by all owners (sellers) and all buyers.c. Information gathering is key to avoiding future problems

i. Obtain copy of the act vesting title to the current owners1. Helpful in determining legal description

ii. Obtain information on owners’ and their status1. Individuals

a. Single/Married/Divorcedb. Dead, alive, interdicted, bankrupt

2. Legal Entitiesa. Who has authority to bind the entity?

3. Property Descriptiona. Legal Description of property being soldb. Listing of movables included in sale

i. Include on lines 20 – 22 if being transferred to buyer with no valueii. Include on lines 27 – 28 if being excluded from the transfer

iii. Include on lines 288 293 if being transferred to buyer, but part of consideration for thepurchase price

4. Deadlines, Dates, and Times

a. Date of Contract (Line 3)

b. Act of Sale (Lines 38 42)i. to be executed before settlement agent or Notary to be chosen by Buyer, on

(date) ii. Any change of date must be mutually agreed upon in writing and signed by Seller

and Buyer.

c. Financed Salei. Buyer to make written loan application no later than days after date of

acceptance (Line 73)

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d. Leases/Special Assessments (Lines 138 143)i. Sale is conditioned upon Buyer’s receipt of copy of all written leases, excluding

mineral leases, and unpaid special assessments from Seller within 5 calendar days of acceptance… Buyer will have 5 calendar days after receipt of aforementioned documents to notify Seller whether they are acceptable to Buyer.

e. Inspection and Due Diligence Period (Lines 150 187)i. Line 157 Inspection period of calendar days from first day after

acceptanceii. Line 172 Buyer’s option to request remedies of deficiencies from seller in writing

gives seller 72 hours to respondiii. Lines 175 182 Additional 72 hours from date of seller’s response or date seller’s

response was due, for buyer to a) accept Seller’s response, b) accept property in current condition, or c) elect to terminate agreement

f. Private Water/Sewerage (Lines 191 199)i. See new sewer/private water addendum

g. Merchantable Title/Curative Work (Lines 230 240)i. If curative work is required, the parties agree to extend closing date to a date not

more than calendar days from date of Act of Sale stated herein.

h. Final Walk Through (Lines 242 246)i. Buyer’s right to reinspect property within 5 days prior to Act of Sale, or Occupancy to

determine if Property is in same or better condition and insure all agreed upon repairs have been completed.

ii. Seller agrees to provide utilities and immediate access to property.iii. How to avoid trouble is it better to reinspect property 5 days prior to closing, 1 day

prior, or 1 hour prior to closing?

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There could be advantages and disadvantages on case by case basis

i. Deadlines (Lines 284 286)i. All “calendar days,” as used in this agreement, end at 11:59 in Louisiana.

j. Expiration of Offer (Lines 351 354)i. This offer is binding and irrevocable until

k. Acceptance, Rejection, Counter Offer (Lines 374 391)i. Date and time of acceptance or counter offer controls some of the other

deadlines within the agreement.

5. Inspection and Due Diligence Period (Lines 150- 187)a. Within Inspection period, if buyer is not satisfied, he may terminate agreement or

indicate in writing the deficiencies and desired remedies.b. Seller will then have 72 hours to respond in writing as to Seller’s willingness to remedy

deficienciesc. Buyer has 72 hours from time of seller’s response or 72 hours from time that seller’s

response was due to:i. accept seller’s responseii. accept the property in its current condition; oriii. elect to terminate the agreement

d. Example: Parties enter into Purchase Agreement which contains special provisions clause that states: “any single mechanical item repair that exceeds $2,000.00 the seller has the option to repair or the contract will be null and void.” Inspector found over $25,000.00 in required repairs. Seller refused to make repairs. Parties argued over who had the option to terminate thecontract. The court said neither party had that right because the clause contained a condition, not an option, and once the condition was fulfilled (repair over $2,000.00 that seller would not fix) the contract automatically became null. Campbell v. Melton, 20012578 (La. 5/14/02) 817 So.2d 69.

e. If buyer fails to make inspections or fails to give written notice of deficiencies and desired remedies to Seller (or seller’s designated agent) within the inspection period, it should be deemed as acceptance by the Buyer of the property’s current condition.

f. How agents can avoid trouble: Make sure to thoroughly explain inspection process to clients, and make sure that they understand. This is an extremely important part of the contract that agents are familiar with, but may not be fully understood by buyers or sellers.

6. Warranty or as is Clause with Waiver of Right of Redhibition (Lines 212 229)

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a. This portion requires an election to be made. To understand these clauses there must first be a discussion of what Louisiana law is as to warranty in a sale. These general rules have an exception, that is the new home warranties.

b. In every sale in Louisiana, including sale of real estate, the Seller by default, and unless changed by contract, warrants two things regarding condition of the Property:

i. That the thing sold is free from redhibitory defects; andii. That the thing is fit for its intended use

c. Redhibitory defects are those that are (a) not apparent or visible or (b) cannot be discovered with simple inspections. Stated another way, Louisiana law is to the effect that if a defect is observable or could have been discovered upon simple inspection, it is not a redhibitory defectand the Buyer buys the property with those defects and they are the Buyer’s problem. (If the Seller knows of the defects and conceals them other problems can arise). So the law on redhibitory defects assumes that there is a defect that cannot be discovered easily or is not readily observable so that neither the Buyer nor the Seller knows about them. If such defects are discovered after the sale within the time period set by law then the Buyer has recourse against the Seller for a reduction in the purchase price (generally the amount to cure the defect), or, if the defects are monumental, then the Buyer may in fact be entitled to rescind thesale, that is transfer the property back in return for a full refund of the full purchase price.Instances of the latter are very rare, but the right does exist. The warranty of fitness forintended use does not arise very often in the residential real estate context since the intended useis “residential” and whether the property is fit for that use is generally readily apparent.Election (A) Sale with Warranties; If this election is made the Seller is selling the property with

all the warranties discussed above. To restate, there is no warranty by the Seller as to apparent oreasily discoverable defects. The warranty applies only to those that are hidden or, as the law calls themredhibitory defects.

Election (B) Sale “As Is” Without Warranties. Electing this clause will relieve the Seller of the warranty against redhibitory defects. If this election is made, the Buyer’s inspections now become muchmore important and Buyers should be alerted that if this election is made the Seller will not be liable for any hidden or redhibitory defects.

Election ( C ) New Home Warranties. The New Home Warranty Act supersedes the general rules of warranty that apply to elections A and B. The New Home Warranty Act sets forth in very specific detail what warranties are made, the time periods for liability of the Seller and the time period that those warranties last. This course will not go into the details and nuances of the New Home Warranty Act as that is a seminar in itself.

7. Default of Agreement by Seller (Lines 248 – 257)a. Seller is not liable for default if agreement is cancelled for the reasons set forth in:

i. Lines 113 – 136 Return of the Deposit; orii. Lines 230 – 240 Failure of Merchantable title

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b. For any other default by seller, the buyer reserves the right to demand and/or sue for any of thefollowing:

i. Termination of the Agreementii. Specific Performance1. Force the seller to sell under terms and conditions of purchase agreement.2. This election is rarely madeiii. Termination of the Agreement in an amount equal to 10% of the sales price

as stipulated damages1. This allows buyer to make the demand and, if necessary, sue and nothave to prove actual damages because the parties have agreed to the amount for damages.

c. In all circumstances, the buyer is entitled to return of the deposit. Further, the prevailing partyto any litigation brought to enforce the agreement shall be awarded attorney fees and costs.The seller may also be liable for broker fees.

8. Default of Agreement by Buyer (Lines 259 – 267)a. Mirror image of the rights granted to buyer if seller defaultsb. Seller retains deposit

Review of Case: White vs Strange

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LOUISIANA RESIDENTIAL AGREEMENT TO BUY OR SELL 1 2

Date: _________________________________ 3 4

PROPERTY DESCRIPTION: I/We offer and agree to Buy/Sell the property at: 5 (Municipal Address) __________________________________________________________________________ 6 City ______________________________; Zip _______________; Parish ______________________; Louisiana, 7 (Legal Description)___________________________________________________________________________ 8 on lands and grounds measuring approximately ____________________________________________________ 9 or as per record title; including all buildings, structures, component parts, and all installed, built-in, permanently 10 attached improvements, together with all fences, security systems, all installed speakers or installed sound 11 systems, all landscaping, all outside TV antennas, all satellite dishes, all installed and/or built-in appliances, all 12 ceiling fans, all air conditioning or heating systems including window units, all bathroom mirrors, all window 13 coverings, blinds and associated hardware, all shutters, all flooring, all carpeting, all cabinet tops, all cabinet 14 knobs or handles, all doors, all door knobs or handles, all windows, all roofing, all electrical systems, and all 15 installed lighting fixtures, chandeliers and associated hardware, other constructions permanently attached to the 16 ground. If owned by the SELLER prior to date of this Agreement, standing timber, unharvested crops and 17 ungathered fruits of trees on the property shall be conveyed to the BUYER. The following movable items here 18 remain with the property, but are not to be considered as part of the Sale Price and have no value: __________ 19 __________________________________________________________________________________________20 __________________________________________________________________________________________21 __________________________________________________________________________________________. 22 All items listed herein are included in the property sold no matter how they are attached or installed, provided that 23 any or all of these items are in place at the time of signing of this Agreement to Buy or Sell (the 24 “Agreement”),unless otherwise stated herein. (All of the above contained in lines 5 through 22 are collectively 25 referred to herein as the “Property.”) The following items are excluded from the Property sold: 26 __________________________________________________________________________________________ 27 __________________________________________________________________________________________. 28

BUYER’S Initials _____ _____ Page 1 of 9 SELLER’S Initials _____ _____

ABS Rev. 01/01/17

□Dual Agent

__________________________________________ Listing Firm

__________________________________________ Seller’s Designated Agent Name & License Number

__________________________________________ Brokerage Firm or Broker Name & License Number

__________________________________________ Phone Number Office Fax

__________________________________________ Email Address

__________________________________________ Selling Firm

__________________________________________ Buyer’s Designated Agent Name & License Number

__________________________________________ Brokerage Firm or Broker Name & License Number

__________________________________________ Phone Number Office Fax

__________________________________________ Email Address

___________________________________________________________________________________________________ Delivered by Designated Agent to Day Date Time AM/PM

___________________________________________________________________________________________________ Comments

___________________________________________________________________________________________________ Received by Designated Agent Day Date Time AM/PM

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__________________________________________________________________________________________ Property address, street, city, state, zip Date

MINERAL RIGHTS: If the SELLER transfers any mineral rights, they are to be transferred without warranty. 29 ________% mineral rights owned by the SELLER are to be reserved by the SELLER and the SELLER shall waive 30 any right to use the surface for any such reserved mineral activity or use. 31

32 PRICE: The Property will be sold and purchased subject to title and zoning restrictions, servitudes of record, and 33 law or ordinances affecting the Property for the sum of ______________________________________________ 34 ________________________________________________Dollars ($___________________) (the “Sale Price”). 35

36 ACT OF SALE: The Act of Sale is to be executed before a settlement agent or Notary Public to be chosen by the 37 BUYER, on _________________________, 20_____, or before if mutually agreed upon. Any change of the date 38 for execution of the Act of Sale must be mutually agreed upon in writing and signed by the SELLER and the 39 BUYER. At closing, the BUYER must provide "good funds" as required by Louisiana statute LA R.S. 22:22.512 et 40 seq. 41

42 OCCUPANCY: Occupancy/possession and transfer of keys is to be granted at Act of Sale unless mutually agreed 43 upon in writing. 44

45 CONTINGENCY FOR SALE OF BUYER’S OTHER PROPERTY: 46 This sale is contingent on the sale of other property by the BUYER and the attached contingency clause47 addendum shall apply. 48 This sale is not contingent upon the sale of other property by the BUYER nor is the loan needed by the49 BUYER to obtain the Sale Price contingent on the BUYER’S sale of any property. 50

51 ALL CASH SALE: The BUYER warrants the BUYER has cash readily available to close the sale of this52 Property. 53 FINANCED SALE: This sale is conditioned upon the ability of BUYER to borrow with this Property as security54 for the loan the sum of $__________________________________________________ or _____% of the Sale 55 Price by a mortgage loan or loans at an initial interest rate not to exceed _____% per annum, interest and 56 principal, amortized over a period of not less than _____ years, payable in monthly installments or on any other 57 terms as may be acceptable to the BUYER provided that these terms do not increase the cost, fees or expenses 58 to the SELLER. The loan shall be secured by: 59 Fixed Rate Mortgage FHA Insured Mortgage60 Adjustable Rate Mortgage Owner Financing61 Rural Development Bond Financing62 VA Guaranteed Mortgage Other _____________________________________63

64 The BUYER agrees to pay discount points not to exceed _____% of the loan amount. 65 Other financing conditions: ____________________________________________________________________ 66 __________________________________________________________________________________________ 67 __________________________________________________________________________________________. 68

69 The BUYER acknowledges and warrants that the BUYER has available the funds which may be required to 70 complete the sale of the Property including, but not limited to, the deposit, the down payment, closing costs, pre-71 paid items, and other expenses. If this sale is a Financed Sale, BUYER acknowledges that any terms and 72 conditions imposed by BUYER’S lender(s) or by Consumer Financial Protection Bureau Requirements shall not 73


ABS Rev. 01/01/17

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affect or extend the BUYER’S obligation to execute the Act of Sale or otherwise affect any terms or conditions of 74 this Agreement except as otherwise set forth herein. The BUYER shall supply the SELLER written documentation 75 from a lender that a loan application has been made and the BUYER has given written authorization to lender to 76 proceed with the loan approval process within (____) calendar days after the date of acceptance of this offer by 77 both parties. If the BUYER fails to make loan application, and to supply SELLER with written documentation of 78 that application and BUYER’S written authorization for lender to proceed with loan process within this period, the 79 SELLER may, at the SELLER’S option, terminate this Agreement, by giving the BUYER written notice of the 80 SELLER’S termination. In the event the BUYER is not able to secure financing, the SELLER reserves the right to 81 provide all or part of mortgage loan(s) under the terms set forth above. 82

83 PRORATIONS/OTHER COSTS: Real estate taxes, flood insurance premium if assumed, rents, condominium 84 dues, assessments, and/or other dues owed to homeowners associations and the like for the current year are to 85 be prorated through the date of the Act of Sale. Act of Sale costs, abstracting costs, title search, title insurance 86 and other costs required to obtain financing, shall be paid by the BUYER, unless otherwise stated herein. All 87 necessary tax, mortgage, conveyance, release certificates or cancellations and the SELLER closing fees, if any, 88 shall be paid by the SELLER. The SELLER shall pay all previous years’ taxes, assessments, condominium dues, 89 and/or dues owed to homeowners associations and the like. All special assessments bearing against the 90 Property prior to Act of Sale, other than those to be assumed by written agreement, as of the date of the Act of 91 Sale, are to be paid by the SELLER. 92

93 APPRAISAL: This sale is NOT conditioned on appraisal. This sale IS conditioned on the appraisal of the94 Property being not less than the Sale Price. The SELLER agrees to provide the utilities for appraisals and access. 95 If the appraised value of the Property is equal to or greater than the Sale Price, the BUYER shall pay the Sale 96 Price agreed upon prior to the appraisal. If the appraised value is less than the Sale Price, the BUYER shall 97 provide the SELLER with a copy of the appraisal within __________ (____) calendar days of receipt of same, 98 along with the BUYER’S written request for the SELLER to reduce the Sale Price. Within __________ (____) 99 calendar days after the SELLER’S receipt of such written documentation of the appraised value, the BUYER shall 100 have the option to pay the Sale Price agreed upon prior to the appraisal or to void this Agreement unless the 101 SELLER agrees in writing to reduce the Sale Price to the appraised value or all parties agree to a new Sale Price. 102 103 DEPOSIT: Upon acceptance of this offer, or any attached counter offer, the SELLER and the BUYER shall be 104 bound by all terms and conditions of this Agreement, and the BUYER or the BUYER’S agent shall deliver 105 immediately, upon notice of acceptance of the offer, the BUYER’S deposit (the “Deposit”) in the amount of 106 $___________________________ or _____% of the Sale Price to be paid in the form of: 107 □ Cash $__________________________________ □ Promissory Note $____________________________108 □ Check $__________________________________109 The Deposit shall be held by __________________________________________________________________. 110

111 Failure to deliver the Deposit shall be considered a default of this Agreement. If the Deposit is held by a Broker, it 112 must be held in accordance with the rules of the Louisiana Real Estate Commission in a federally insured banking 113 or savings and loan institution without responsibility on the part of the Broker in the case of failure or suspension 114 of such institution. In the event the parties fail to execute an Act of Sale by date specified herein, and/or a dispute 115 arises as to ownership of, or entitlement to, the Deposit or funds held in escrow, the Broker shall abide by the 116 Rules and Regulations set forth by the Louisiana Real Estate Commission. 117 118 RETURN OF DEPOSIT: The Deposit shall be returned to the BUYER and this Agreement declared null and void 119 without demand in consequence of the following events: 120


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1) If this Agreement is declared null and void by the BUYER during the inspection and due diligence period as set 121 forth in lines 162 through 195 of this Agreement; 122 123 2) If this Agreement is subject to the BUYER’S ability to obtain a loan and the loan cannot be obtained, except as 124 stated in lines 70 through 82 of this Agreement, but only if the BUYER has made timely application for the loan 125 and made good faith efforts to obtain the loan; 126 127 3) If the BUYER conditions the Sale Price on an appraisal and the appraisal is less than the Sale Price and the 128 SELLER will not reduce the Sale Price as set forth in lines 94 through 102 of this Agreement; 129 130 4) If the BUYER timely terminates the Agreement after having received the leases or assessments, as set forth in 131 lines 143 through 148 of this Agreement; 132 133 5) If the SELLER is unable to timely deliver to the BUYER an approved sewerage and/or water inspection report 134 as set forth in lines 197 through 206. 135 136 6.) If the SELLER chooses not to repair or replace the sewer system(s) as per the SEPTIC/WATER WELL 137 ADDENDUM, and the BUYER terminates the agreement as a result thereof. 138 139 7.) If the SELLER chooses not to repair or replace the private water well system(s) as per the SEPTIC/WATER 140 WELL ADDENDUM, and the BUYER terminates the agreement as a result thereof. 141

142 LEASES/SPECIAL ASSESSMENTS: The sale is conditioned upon the BUYER'S receipt of a copy of all written 143 leases, excluding mineral leases, and unpaid special assessments from the SELLER within five (5) calendar days 144 of acceptance of the Agreement. Special assessments shall mean an assessment levied on Property to pay the 145 cost of local improvements imposed by local governmental/governing authority. The BUYER will have five (5) 146 calendar days after receipt of the aforementioned documents to notify the SELLER whether they are acceptable 147 to the BUYER. Security deposits, keys and leases are to be transferred to the BUYER at Act of Sale. 148 149 NEW HOME CONSTRUCTION: If the property to be sold is completed new construction, under construction, or to 150 be constructed, check one: 151 □ A new home construction addendum, with additional terms and conditions, is attached.152 □ There is no new home construction addendum.153

154 INSPECTION AND DUE DILIGENCE PERIOD: The BUYER ACKNOWLEDGES THAT THE SALE PRICE OF 155 THE PROPERTY WAS NEGOTIATED BASED UPON THE PROPERTY'S APPARENT CURRENT CONDITION; 156 ACCORDINGLY, the SELLER IS NOT OBLIGATED TO MAKE REPAIRS TO THE PROPERTY, INCLUDING 157 REPAIRS REQUIRED BY THE LENDER UNLESS OTHERWISE STATED HEREIN. THE SELLER IS 158 RESPONSIBLE FOR MAINTAINING THE PROPERTY IN SUBSTANTIALLY THE SAME OR BETTER 159 CONDITION AS IT WAS WHEN THE AGREEMENT WAS FULLY EXECUTED. 160 161 The BUYER shall have an inspection and due diligence period of (_____) calendar days, commencing the first 162 day after acceptance of this Agreement wherein, the BUYER may, at the BUYER’S expense, have any 163 inspections made by experts or others of his choosing. Such physical inspections may include, but are not limited 164 to, inspections for termites and other wood destroying insects, and/or damage from same, molds, and fungi 165 hazards, and analysis of synthetic stucco, drywall, appliances, structures, foundations, roof, heating, cooling, 166 electrical, plumbing systems, utility and sewer availability and condition, out-buildings, and square footage. Other 167 due diligence by the BUYER may include, but is not limited to investigation into the property’s school district, 168 insurability, flood zone classifications, current zoning and/or subdivision restrictive covenants and any items 169 addressed in the SELLER’S Property Disclosure Document. All testing shall be nondestructive testing. The 170 SELLER agrees to provide the utilities for inspections and immediate access. Inspection period will be extended 171


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by the same number of days that the BUYER is not granted immediate access to the property or all utilities are 172 not provided by the SELLER. If the BUYER is not satisfied with the condition of the Property or the results of the 173 BUYER’S due diligence investigation, the BUYER may choose one of the following options within the inspection 174 and due diligence period: 175 176 Option 1: The BUYER may elect, in writing, to terminate the Agreement and declare the Agreement null and void; 177 or 178 Option 2: The BUYER may indicate in writing the deficiencies and desired remedies and the SELLER will within 179 seventy two (72) hours respond in writing as to the SELLER’S willingness to remedy those deficiencies 180 (“SELLER’S Response”). 181

182 Should the SELLER in the SELLER’S Response refuse to remedy any or all of the deficiencies listed by the 183 BUYER, then the BUYER shall have seventy-two (72) hours from the date of the SELLER'S Response or 184 seventy-two (72) hours from the date that the SELLER'S Response was due, whichever is earlier, to: (a) accept 185 the SELLER'S Response to the BUYER’S written requests or (b) accept the Property in its current condition, or (c) 186 to elect to terminate this Agreement. The BUYER’S response shall be in writing. Upon the BUYER'S failure to 187 respond to the SELLER’S Response by the time specified or the BUYER’S electing, in writing, to terminate this 188 Agreement, the Agreement shall be automatically, with no further action required by either party, ipso facto null 189 and void except for return of Deposit to the BUYER. 190 191 FAILURE TO GIVE WRITTEN NOTICE OF EITHER TERMINATION OR DEFICIENCIES AND DESIRED 192 REMEDIES TO THE SELLER (OR THE SELLER’S DESIGNATED AGENT) AS SET FORTH IN LINES 155 193 THROUGH 181 WITHIN THE INSPECTION AND DUE DILIGENCE PERIOD SHALL BE DEEMED AS 194 ACCEPTANCE BY THE BUYER OF THE PROPERTY'S CURRENT CONDITION. 195 196 PRIVATE WATER/SEWERAGE: 197 □ There is/are __________ (____) private water system(s) servicing only the primary residence, and the attached198 private Septic/Water Addendum inspections shall include only the system(s) supplying service to the primary 199 residence. 200

201 □ There is/are __________ (____) private septic/treatment system(s) servicing only the primary residence and202 the attached private Septic/Water Addendum inspections shall include only those systems supplying service to 203 the primary residence. 204 205 □ There is NO private septic/treatment system(s) servicing only the primary residence.206 207 HOME SERVICE/WARRANTY: A home service/warranty plan will / will not be purchased at the closing of208 sale at a cost not to exceed $________________ to be paid by the BUYER / the SELLER. Home Service209 Warranty will be ordered by ___________________________________________________________________. 210

211 It is understood that the Agent/Broker may receive compensation from the home warranty company for actual 212 services performed. The home service warranty plan does not warrant pre-existing defects and options, and does 213 not supersede or replace any other inspection clause or responsibilities. If neither the BUYER nor the SELLER 214 accepts the home service warranty plan, they declare that they have been made aware of the existence of such a 215 plan, and further declare that they hold the Broker and Agents harmless from any responsibility or liability due to 216 their rejection of such a plan. 217


ABS Rev. 01/01/17 13


WARRANTY OR AS IS CLAUSE WITH WAIVER OF RIGHT OF REDHIBITION: (CHECK ONE ONLY) 218 A. SALE WITH WARRANTIES: The SELLER and the BUYER acknowledge that this sale shall be with full219 SELLER warranties as to any claims or causes of action including but not limited to redhibition pursuant to 220 Louisiana Civil Code Article 2520, et seq. and Article 2541, et seq. 221 B. SALE “AS IS” WITHOUT WARRANTIES: The SELLER and the BUYER hereby acknowledge and recognize222 that the Property being sold and purchased is to be transferred in “as is” condition and further the BUYER does 223 hereby waive, relieve and release the SELLER from any claims or causes of action for redhibition pursuant to 224 Louisiana Civil Code Article 2520, et seq. and Article 2541, et seq. or for reduction of Sale Price pursuant to 225 Louisiana Civil Code Article 2541, et seq. Additionally, the BUYER acknowledges that this sale is made without 226 warranty of fitness for ordinary or particular use pursuant to Louisiana Civil Code Article 2524. The SELLER and 227 the BUYER agree that this clause shall be made a part of the Act of Sale. 228 C. NEW HOME WARRANTIES. Notwithstanding lines 218 through 228 and irrespective of whether A or B229 above is checked, if the Property is a new construction, the parties agree that neither A or B will apply but instead 230 the provisions of the New Home Warranty Act (LA R.S. 9:3141 et seq.) shall apply. The warranty of condition of 231 this Property is governed by the New Home Warranty Act if a home on the Property is a “home” as defined in the 232 New Home Warranty Act. 233

234 MERCHANTABLE TITLE/CURATIVE WORK: The SELLER shall deliver to the BUYER a merchantable title at 235 the SELLER’S costs (see lines 239 through 241). In the event curative work in connection with the title to the 236 Property is required or is a requirement for obtaining the loan(s) upon which this Agreement is conditioned, the 237 parties agree to and do extend the date for passing the Act of Sale to a date not more than 238 _____________________________ (_____) calendar days from the date of the Act of Sale stated herein. The 239 SELLER’S title shall be merchantable and free of all liens and encumbrances except those that can be satisfied at 240 Act of Sale. All costs and fees required to make title merchantable shall be paid by the SELLER. The SELLER 241 shall make good faith efforts to deliver merchantable title. The SELLER’S inability to deliver merchantable title 242 within the time stipulated herein shall render this Agreement null and void, reserving unto the BUYER the right to 243 demand the return of the Deposit and to recover from the SELLER actual costs incurred in processing of sale as 244 well as legal fees incurred by the BUYER. 245

246 FINAL WALK THROUGH: The BUYER shall have the right to re-inspect the Property within five (5) calendar 247 days prior to the Act of Sale, or occupancy, whichever will occur first in order to determine if the Property is in the 248 same or better condition as it was at the initial inspection(s) and to insure all agreed upon repairs have been 249 completed. The SELLER agrees to provide utilities for the final walk through and immediate access to the 250 Property. 251

252 DEFAULT OF AGREEMENT BY THE SELLER: In the event of any default of this Agreement by the SELLER, 253 the BUYER shall at the BUYER’S option have the right to declare this Agreement null and void with no further 254 demand, or to demand and/or sue for any of the following: 255

256 1) Termination of this Agreement; 2) Specific performance; 3) Termination of this Agreement and an amount 257 equal to 10% of the Sale Price as stipulated damages. 258

259 Further, the BUYER shall be entitled to the return of the Deposit. The prevailing party to any litigation brought to 260 enforce any provision of this Agreement shall be awarded their attorney fees and costs. The SELLER may also be 261 liable for Broker fees. 262

263 DEFAULT OF AGREEMENT BY BUYER: In the event of any default of this Agreement by the BUYER, the 264 SELLER shall have at the SELLER’S option the right to declare this Agreement null and void with no further 265


ABS Rev. 01/01/17 14


demand, or to demand and sue for any of the following: 1) Termination of this Agreement; 2) Specific 266 performance; 3) Termination of this Agreement and an amount equal to 10% of the Sale Price as stipulated 267 damages. 268 269 Further, the SELLER shall be entitled to retain the Deposit. The prevailing party to any litigation brought to 270 enforce any provision of this Agreement shall be awarded their attorney fees and costs. The BUYER may also be 271 liable for Broker fees. 272 273 MOLD RELATED HAZARDS NOTICE: An informational pamphlet regarding common mold related hazards that 274 can affect real property is available at the EPA website http://www.epa.gov/iaq/molds/index.html. By initialing 275 this page of the Agreement, the BUYER acknowledges that the real estate agent has provided the BUYER with 276 the EPA website enabling the BUYER to obtain information regarding common mold related hazards. 277

278 OFFENDER NOTIFICATION: The Louisiana State Police maintains the State Sex Offender and Child Predator 279 Registry through the Louisiana Bureau of Criminal Identification and Information. It is a public access database of 280 the locations of individuals who are required to register pursuant to LA R.S. 15:540, et seq. The website for the 281 database is http://www.lsp.org/socpr/default.html. Sheriff and police departments serving jurisdictions of 282 450,000 also maintain such information. Inquiries can be made by phone at 1-800-858-0551 or 1-225-925-6100. 283 Send written inquiries to Post Office Box 66614, Box A-6, Baton Rouge, Louisiana 70896. 284 285 CHOICE OF LAW: This Agreement shall be governed by and shall be interpreted in accordance with the laws of 286 the State of Louisiana. 287 288 DEADLINES: TIME IS OF THE ESSENCE and all deadlines are final, except where modifications, changes, or 289 extensions are made in writing and signed by all parties to this Agreement. All “calendar days” as used in this 290 Agreement shall end at 11:59 p.m. in Louisiana. 291 292 ADDITIONAL TERMS AND CONDITIONS: 293 __________________________________________________________________________________________294 __________________________________________________________________________________________ 295 __________________________________________________________________________________________296 __________________________________________________________________________________________ 297 __________________________________________________________________________________________298 __________________________________________________________________________________________ 299 300 ROLES OF BROKERS AND DESIGNATED AGENTS: Broker(s) and Designated Agent(s) have acted only as 301 real estate brokers to bring the parties together and make no warranty to either party for performance or non 302 performance of any part of this Agreement or for any warranty of any nature unless specifically set forth in writing. 303 304 Broker(s) and Designated Agent(s) make no warranty or other assurances whatsoever concerning Property 305 measurements, square footage, room dimensions, lot size, Property lines or boundaries. Broker(s) and 306 Designated Agent(s) make no representations as to suitability or to a particular use of the Property, and the 307 BUYER has or will independently investigate all conditions and characteristics of the Property which are important 308 to the BUYER. The BUYER is not relying on the Broker or the Designated Agent(s) to choose a representative to 309 inspect or re-inspect the Property; the BUYER understands any representative desired by the BUYER may 310 perform this function. In the event Broker/Agent(s) provides names or sources for such advice or assistance, 311 Broker/Agent(s) does not warrant the services of such experts or their products and cannot warrant the condition 312 of Property or interest to be acquired, or guarantee that all defects are disclosed by the SELLER(S). 313 Broker/Agent(s) do not investigate the status of permits, zoning, code compliance, restrictive covenants, or 314


ABS Rev. 01/01/17 15


insurability. The Broker(s) and Designated Agent(s) specifically make no warranty whatsoever as to whether or 315 not the Property is situated in or out of the Government’s hundred year flood plan or is or would be classified as 316 wetlands by the U.S. Army Corps of Engineers, or as to the presence of wood destroying insects or damage there 317 from. The BUYER(S) are to satisfy themselves concerning these issues. Designated Agent shall be an 318 independent contractor for Broker if the conditions as set forth in LA R.S. 37:1446(h) are met. 319 320 LIST ADDENDA TO BE ATTACHED AND MADE A PART OF THIS AGREEMENT: 321 □ Contingency for Sale of the BUYER’S Other Property Addendum □ Private Water/Sewerage Addendum322 □ Condominium Addendum □ ______________________________323 □ FHA Amendatory Clause □ ______________________________324 □ New Construction Addendum □ ______________________________325 326 If any of the pre-printed portions of this Agreement vary or are in conflict with any additional or modified terms on 327 blanks provided in this form or Addendum attached to this Agreement, the additional, modified or Addendum 328 provisions control. 329 330 SINGULAR – PLURAL USE: Wherever the word BUYER or the word SELLER occurs in this Agreement or is 331 referred to, the same shall be construed as singular or plural, masculine or feminine or neuter, as the case may 332 be. 333

334 ACCEPTANCE: Acceptance of this Agreement must be in writing. This agreement may be executed by use of 335 electronic signatures, in accordance with the Louisiana Uniform Electronic Transaction Act. The original of this 336 Agreement shall be delivered to the listing Broker’s firm. This Agreement and any supplement addendum or 337 modification relating hereto, including any photocopy, facsimile or electronic transmission thereof, may be 338 executed in two or more counterparts, all of which shall constitute one and the same Agreement. 339

340 NOTICES AND OTHER COMMUNICATIONS: All notices, requests, claims, demands, and other communications 341 related to or required by this Agreement shall be in writing. Notices permitted or required to be given (excluding 342 service of process) shall be deemed sufficient if delivered by (a) mail, (b) hand delivery; (c) overnight delivery; (d) 343 facsimile, (e) e-mail, or (f) other e-signature transmissions addressed to the respective addresses of the parties 344 as (a) written on the first page of this Agreement; (b) as designated below on lines 357 through 365; or (c) at such 345 other addresses as the respective parties may designate by written notice. 346 347 The BUYER and SELLER agree the use of electronic documents and digital signatures is acceptable and will be 348 treated as originals of the signatures and documents transmitted in the above referenced real estate transaction. 349 Specifically, the BUYER and SELLER consent to the use of electronic documents, the electronic transmission of 350 documents, and the use of electronic signatures pertaining to this Agreement, and any supplement addendum or 351 modification relating thereto, including but not limited to any notices, requests, claims, demands and other 352 communications as set forth in the Agreement. 353 The BUYER further authorizes notices and other communications to be delivered electronically to the following354 address(es): 355

356 BUYER address(es): __________________________________________________________________ 357

With a copy to: 358 BUYER’s Agent address(es): ____________________________________________________________ 359


ABS Rev. 01/01/17 16


The SELLER further authorizes notices and other communications to be delivered electronically to the 360 following address(es): 361

362 SELLER address(es): _________________________________________________________________ 363

With a copy to: 364 SELLER’s Agent address(es): ___________________________________________________________ 365

CONTRACT: This is a legally binding contract when signed by both the SELLER and the BUYER. READ IT 366 CAREFULLY. If you do not understand the effect of any part of this Agreement seek legal advice before signing 367 this contract or attempting to enforce any obligation or remedy provided herein. 368 369 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement between the parties, and any other 370 agreements not incorporated herein in writing are void and of no force and effect. 371 372 EXPIRATION OF OFFER: 373 This offer is binding and irrevocable until ______________, 20_____ at _____ AM PM MIDNIGHT NOON. 374 The Acceptance of this offer must be communicated to the offering party by the deadline stated on line 374 to be 375 binding and effective. 376

377 X__________________________________________ X_________________________________________ 378 Buyer’s / Seller’s Signature Date/Time AM PM Buyer’s / Seller’s Signature Date/Time AM PM 379 ___________________________________________ __________________________________________ 380 Print Buyer’s/Seller’s Full Name (First, Middle, Last) Print Buyer’s/Seller’s Full Name (First, Middle, Last) 381 ___________________________________________ __________________________________________382 Street Address Street Address 383 ___________________________________________ __________________________________________ 384 City, State, Zip City, State, Zip 385 ___________________________________________ __________________________________________ 386 Telephone Number.Cell Telephone Number.Cell 387 ___________________________________________ __________________________________________ 388 Telephone Number.Home Telephone Number.Work Telephone Number.Home Telephone Number.Work389 ___________________________________________ __________________________________________ 390 E-Mail Address E-Mail Address 391 __________________________________________________________________________________________ 392 This offer was presented to the Seller Buyer by Day/ Date/ Time AM PM MIDNIGHT NOON393

394 395

This offer is: Accepted Rejected (without counter) Countered (See Attached Counter) by:396 397

X__________________________________________ X__________________________________________ 398 Buyer’s / Seller’s Signature Date/Time AM PM Buyer’s / Seller’s Signature Date/Time AM PM 399 ___________________________________________ __________________________________________ 400 Print Buyer’s/Seller’s Full Name (First, Middle, Last) Print Buyer’s/Seller’s Full Name (First, Middle, Last) 401 ___________________________________________ __________________________________________402 Street Address Street Address 403 ___________________________________________ __________________________________________ 404 City, State, Zip City, State, Zip 405 ___________________________________________ __________________________________________ 406 Telephone Number.Cell Telephone Number.Cell 407 ___________________________________________ __________________________________________ 408 Telephone Number.Home Telephone Number.Work Telephone Number.Home Telephone Number.Work409 ___________________________________________ __________________________________________ 410 E-Mail Address E-Mail Address 411 __________________________________________________________________________________________ 412 This counter offer was presented to the Seller Buyer by Day/ Date/ Time AM PM MIDNIGHT NOON

ABS Rev. 01/01/17 Page 9 of 9 17

White v. Strange, 80 So.3d 1189 (2011)2011-523 (La.App. 3 Cir. 12/21/11)

© 2013 Thomson Reuters. No claim to original U.S. Government Works. 1

80 So.3d 1189Court of Appeal of Louisiana,

Third Circuit.

Julie C. WHITE, et vir.v.

Lucas STRANGE, et ux.

No. 11–523. | Dec. 21, 2011.

SynopsisBackground: Vendor brought action against prospectivepurchaser, seeking stipulated damages under purchaseagreement after purchaser allegedly failed to timelyterminate the agreement to purchase a home. The PinevilleCity Court, Parish of Rapides, Docket No. 90,143, F. RaeSwent, Judge Ad Hoc, entered judgment in favor of vendor,awarding her stipulated damages, the forfeited deposit, andattorney fees. Purchaser appealed.

Holdings: The Court of Appeal, Cooks, J., held that:

[1] purchaser's e-mail did not constitute a “writing” sufficientto legally terminate the purchase agreement;

[2] vendor was entitled to stipulated damages under theagreement; and

[3] trial court acted within its discretion in awarding vendorattorney fees.

Affirmed.

West Headnotes (4)

[1] Vendor and PurchaserActs constituting rescission

Prospective purchaser's e-mail to vendor didnot constitute a “writing” sufficient to legallyterminate the home purchase agreement in atimely manner; agreement afforded purchaseran eight-day inspection period during whichpurchaser could terminate the agreement insigned writing, the home's listing agreement

included an unchecked box indicating vendordid not authorize electronic signatures, andpurchaser continued to arrange for inspectionsof the home throughout the eight-day period,thereby evincing no intent to terminate theagreement.

[2] DamagesDeposit to be forfeited on breach

DamagesOperation and Effect of Stipulations

Vendor was entitled to stipulated damages inthe amount of ten percent of the purchaseprice of home, $22,320, plus forfeiture ofthe deposit of $4,000, pursuant to stipulateddamages provision of purchase agreement,which was triggered by purchaser's failure totimely terminate the agreement in writing beforeexpiration of eight-day inspection period. LSA–C.C. art. 2005.

[3] DamagesOperation and Effect of Stipulations

A stipulated damages clause fixes the amountof damages that may be recovered for breach ofcontract. LSA–C.C. art. 2005.

[4] CostsVendor and purchaser; sales

Trial court acted within its discretion inawarding vendor attorney fees in the amount of$7,500, in action brought by vendor to enforcehome purchase agreement after prospectivepurchaser failed to terminate the agreement priorto expiration of eight-day inspection period;agreement provided for attorney fees in the caseof non-performance, and trial court providedfacts and figures for setting the amount it did.

18



Attorneys and Law Firms

*1189 Susan Ford Fiser, Alexandria, LA, for Plaintiffs/Appellees, Julie C. and James White.

Robert G. Nida, Gold, Weems, Bruser, Sues & Rundell,Alexandria, LA, for Defendants/Appellants, Lucas and SheriStrange.

Richard E. Lee, Pineville, LA, for Defendant/Appellee, CindyEnglish.

*1190 Court composed of SYLVIA R. COOKS, JAMES T.GENOVESE, and PHYLLIS M. KEATY, Judges.

Opinion

COOKS, Judge.

**1 This appeal involves a suit on a contract to buy and sellreal estate. The prospective buyers in this case attempted toterminate the contract to buy the property. Finding the partiesentered into a valid and binding agreement to buy and sellproperty and the seller did not receive a timely written noticeto cancel the sale from the buyer, the trial court renderedjudgment in favor of the sellers. This appeal followed.

FACTS AND PROCEDURAL HISTORY

The plaintiffs-prospective sellers are Julie and James Whiteand the defendants-prospective buyers are Lucas and SheriStrange. The home and accompanying property located inPineville, Louisiana, is titled in the name of Julie ConverseBaker, who purchased the property before her marriage toJames White. The Stranges both signed the buy and sellagreement on December 3, 2008. Julie Converse Baker Whitesigned the buy and sell agreement on December 4, 2008.

The buy and sell agreement contained certain standardprovisions for the buyer's right of inspection. The buyer hadan eight-day inspection period, beginning on the day afterthe buy and sell agreement was signed. If the buyer was notsatisfied with the condition of the property, the buyer hadthe following options: (1) elect, in writing, to terminate theagreement and declare it null and void, or (2) indicate inwriting the deficiencies and desired remedies from the seller.The seller then has seventy-two hours in which to respond inwriting to indicate any willingness to remedy the deficiencies.If the seller declines to remedy some or all of the problems,

the buyer then has a seventy-two hour period to (1) acceptthe seller's response; (2) accept the current condition of theproperty; or (3) elect to terminate the agreement. The buy andsell agreement also provides that the buyer's failure to makean inspection or failure to respond in writing **2 within theeight-day period shall be deemed an acceptance of the currentcondition of the property.

The inspection period for the property in question wasDecember 5, 2008 through December 12, 2008. An inspectionof the property was performed by Daniel Tarver on December6, 2008. The report contained the following pertinentcomments: “The retaining wall is leaning. I also noted woodrot on several of the landscape timbers.”

After reading the inspection report, Mr. Strange, who hada mechanical engineering degree, was concerned over theproblems with the retaining wall. He believed repairs of thewall would be costly, and questioned whether he wanted toincur such an expense. The Stranges' real estate agent, AngieSikes, informed Cindy English, the White's real estate agent,of the Stranges' concerns and the possibility they might seekto terminate the buy and sell agreement.

Ms. English then requested a second inspection report on theretaining wall. Mr. Tarver inspected the property a secondtime and reported that the retaining wall was intact and therewas no erosion. He noted maintenance and eye appeal couldbe improved for approximately $5,000.00 to $6,000.00.

Following this report, on December 9, 2008, the Strangessent to Sikes an e-mail asserting they wished to terminatethe contract and declare the contract null and void. Theystated the “decision was made due to the uncertainty of thestructural *1191 soundness of the retainer wall and thepotential damage that could be caused.” Sikes then forwardedthis e-mail to Brad Youngblood, a loan officer who wasworking with the Stranges, who acknowledged receipt of thee-mail. Ms. Sikes also asserted she forwarded a copy of the e-mail to English, but English denied ever receiving the e-mail.There was a previous incident acknowledged by both Sikesand English, involving an e-mail that was sent by Sikes thatEnglish could not open. A copy of the e-mail was then faxedto English.

**3 Sikes and English testified they had a conversation onDecember 9, 2008. In that conversation, Sikes maintained shehad gotten confirmation from English that she had receivedthe e-mail. Sikes believed she had made a written notation of

19



that fact, but her notes did not bear that out. English stated shewas with Tarver at the second inspection when she was calledby Sikes. According to English, she was told by Sikes thatthe Stranges were considering terminating the contract, andEnglish would get something from her as soon as possible.

The record confirms on December 14, 2008, Sikes e-maileda request to English to forward her a copy of the December9, 2008 inspection report on the retaining wall. That reportwas faxed by English to Sikes that day. On December 15,2008, the Stranges sent to English a “Buyers Response toInspection” (which was a standard form), indicating there wasa deficiency in the retaining wall. Julie White immediatelyresponded that they would repair or remedy the complaint.Despite this offer to remedy the complaint, the Stranges didnot proceed with the closing.

On December 29, 2008, the Stranges sent an “Agreementto Terminate and/or Release of Deposit” to the Whites. TheWhites refused to return the deposit. The $4,000.00 depositremained with Perego Realty.

The Whites filed suit against the Stranges for damagessuffered, alleging they defaulted on an agreement to purchasethe property. The Stranges filed a third party demand againstPerego Realty and Cindy English as the authorized agents forthe Whites.

The matter went to trial. The Stranges argued their December9, 2008 e-mail to Sikes constituted a “writing” sufficient tolegally terminate the buy and sell agreement. At the close oftrial, the trial judge took the matter under advisement. Shortlythereafter and before rendering a decision, the trial judgepassed away, and the matter was transferred to another judge.After reviewing the record, that judge **4 then renderedwritten reasons finding the parties entered into a valid andbinding agreement to buy and sell the property, and therewas no timely writing to cancel the sale. Further, the trialjudge noted there was no refusal by the sellers to repair thedeficiencies listed in the inspection report. Judgment wasrendered in favor of the Whites, and awarding damages in theamount of $22,320.00, a forfeit of the $4,000.00 deposit and$7,500.00 in attorney fees.

The Stranges contend on appeal that the termination of thebuy and sell agreement was valid and that the court erred inruling in favor of the Whites. In the alternative, the Strangesargue even if it were found they did not validly terminate

the buy and sell agreement, the trial court's erred in awardingdamages to the Whites.

ANALYSIS

I. Was the Buy and Sell Agreement Validly Terminated?[1] As they did below, the Stranges argue the Louisiana

Uniform Electronic *1192 Transactions Act, La.R.S.9:2601–2620, is applicable and allows for the use of an e-mailto validly terminate the buy and sell agreement in this case.Under the facts of this case, we do not agree.

Louisiana Revised Statutes 9:2605 B(1) provides the Actapplies “only to transactions between parties, each of whichhas agreed to conduct transactions by electronic means.”Under La.R.S. 9:2605 B(2), no formal agreement is needed,but “the context and surrounding circumstances, including theconduct of the parties, shall determine whether the partieshave agreed to conduct a transaction by electronic means.”In finding there was no formal agreement nor any conductof the parties indicating an agreement to use electronictransmissions, the trial court reasoned:

This court has no difficulty in finding that the parties haveagreed in this case to the use of a facsimile machine. Underthe Buy–Sell Agreement, the parties are permitted to senddocuments by fax, **5 but original signatures “shall”be submitted to the listing agent. Then, the parties mayuse other electronic means for any supplement addendumor modification to the Acceptance. No reference to theUniform Act is required for anything having to do withthe Acceptance. There was no supplement, addendumor modification, although the testimony showed that thebuyers made multiple verbal requests, such as beginning awall and early occupancy.

Even if this clause was sufficient to invoke the “Act,” theseparties had no regular use of any electronic transmission,other than fax. While Sikes and her client may have usedemail, there is only one reference in the testimony to Sikesand English using email before the 9th and that was nota successful use. The court believes that Sikes believedthat English told her she got the email; however, Sikes,knowing the email was sent, believed there was more toher conversation with English than was actually said. It isnot uncommon for two parties to have a conversation aboutan event and not understand one had more informationthan the other. The notes that Sikes made only referenced

20



whether or not the Whites “knew” something and did notcontain any reference to the email.

The conduct of the parties did not give any indication thatthe Whites or English did or would agree to the use of aforwarded email as the means of canceling the Agreementto Buy and Sell. The Court also believes that English didnot get the email. Her testimony is somewhat corroboratedby the exchange between Youngblood and Daniels on the12th, to the effect that English did not know until 12th thatthe closing was not going to take place on the 15th. Evenwhen she learned the closing would not take place, she stilldid not know the sale would never take place, especiallysince she received a request for the Tarver report on the14th and the Buyer's Response on the 15th. Accordingto her testimony, English did not receive any terminationnotice in writing and, so, she simply believed that Sikes toldher the Stranges wanted to terminate as a negotiation tactic.The court does not find this conclusion to be unreasonable.

The court also questions whether cancelling a buy-sellagreement is a situation where it would be appropriateto apply the “Act.” This is a real estate transactionand there was testimony from all concerned that realtorsare required to use certain contract forms, including theProperty Inspection Response forms. In fact, Sikes testifiedthat her Broker instructed her to complete and sendthe inspection report on *1193 the 15th. Thus, whileelectronic transmissions other than a fax may be convenientfor those negotiating the details of everyday business, itwould appear that the Louisiana Real Estate Commissionbelieves that certain significant actions should be in acertain form. In fact, on 12/29, Sikes used a pre-printedform to attempt termination and return of the deposit. Thisdocument appear to be the type of form that could be usedfor termination, but, in this **6 case, the document cametoo late. There was no “writing” sufficient to cancel thecontract on or by the 12th of December.

We find no error in the trial judge's reasoning in support ofher finding that the Stranges failed to timely terminate the buyand sell agreement.

We also note in the Listing Agreement, completed by Englishand signed by Julie White, the box that states “Sellerauthorized the authentication of his signature or of thePurchaser's by facsimile (fax) or e-mail” was left unchecked.This contradicts the Stranges' contention that e-mail wasauthorized by the parties in this case.

Further, the record indicates, as late as December 14, 2008,Sikes was still requesting inspection reports and appraisalsfrom English, which gave English no reason to believe theStranges were not still negotiating details of the purchase ofthe house. Sikes herself testified that on December 15, 2008,the Stranges were still asking for reports and for things tobe repaired and changed at the house. English testified onDecember 14, 2008, she called Sikes to inform her that KevinBell, the foundation repair person, was meeting her at thehouse, and she would forward his report to Sikes as soonas she received it. According to English, Sikes responded“okay,” further leading English to believe the agreement tobuy and sell had not been terminated. The record clearlyestablishes the conduct of the Stranges and Sikes does notreflect that of parties who believed the buy and sell agreementhad been terminated.

II. Damages.[2] Finding the parties entered into a valid and binding buy

and sell agreement, and under Option 1 of the agreementthere was no timely writing to cancel the sale and, underOption 2, the sellers did not refuse to repair the deficiencieslisted on the Buyers Response to Property Inspection Report,the trial judge found the sellers were entitled to damages.The trial judge noted the Agreement provided for stipulateddamages in the amount of ten percent (10%) of the purchaseprice **7 $22,320.00), forfeiture of the deposit ($4,000.00),and attorney fees ($7,500.00). Thus, the only amount whichwas subject to any discretion was the trial judge's awardof attorney fees. The trial judge did not accept the Whites'arguments below that the Stranges were in bad faith and theyshould be liable for actual damages.

The Stranges' assignment of error, asserting the trial judgeshould have ordered Perego Realty to refund the $4,000.00deposit to them, was premised on its belief that the buy andsell agreement was properly terminated. Finding no error inthe trial court's ruling that the agreement was not properlyterminated, this assignment of error has no merit.

[3] As to the award of damages in the amount of $22,320.00,we find the trial court correctly applied the stipulated amountof damages listed in the buy and sell agreement. The law isestablished that parties to a contract may stipulate damagesto be recovered in case of non-performance. See La.Civ.Codeart. 2005. A stipulated damage clause fixes the amountof damages that may be recovered *1194 for breach ofcontract. Nesbitt v. Dunn, 28,240 (La.App. 2 Cir. 4/3/96), 672So.2d 226.

21



[4] We also find no abuse of discretion in the trial court'saward of $7,500.00 in attorney fees. The buy and sellagreement provided for attorney fees in the case of non-performance, and the trial court provided facts and figures forsetting the amount it did.

DECREE

For the foregoing reasons, the judgment of the trial court isaffirmed. Costs of this appeal are assessed against appellants,Lucas and Sheri Strange.

AFFIRMED.

Parallel Citations

2011-523 (La.App. 3 Cir. 12/21/11)

End of Document © 2013 Thomson Reuters. No claim to original U.S. Government Works.

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How to Stay out of Trouble - 2016HOW TO STAY OUT OF TROUBLE IN A TROUBLED WORLDRelationship Between Real Estate Agents and Buyers/SellersListing AgreementsDuty of CareDetrimental RelianceDisclosuresPurchase Agreement4. Deadlines, Dates, and TimesReview of Case: White vs Strange

01-01-17 Buy Sell Agree LETTERBUYER’S Initials _____ _____ Page 2 of 9 SELLER’S Initials _____ _____BUYER’S Initials _____ _____ Page 3 of 9 SELLER’S Initials _____ _____1) If this Agreement is declared null and void by the BUYER during the inspection and due diligence period as set forth in lines 162 through 195 of this Agreement;2) If this Agreement is subject to the BUYER’S ability to obtain a loan and the loan cannot be obtained, except as stated in lines 70 through 82 of this Agreement, but only if the BUYER has made timely application for the loan and made good faith effo...SELLER agrees to provide the utilities for inspections and immediate access. Inspection period will be extendedBUYER’S Initials _____ _____ Page 4 of 9 SELLER’S Initials _____ _____BUYER’S Initials _____ _____ Page 5 of 9 SELLER’S Initials _____ _____WARRANTY OR AS IS CLAUSE WITH WAIVER OF RIGHT OF REDHIBITION: (CHECK ONE ONLY)ADDITIONAL TERMS AND CONDITIONS:LIST ADDENDA TO BE ATTACHED AND MADE A PART OF THIS AGREEMENT:EXPIRATION OF OFFER:X__________________________________________ X_________________________________________ Buyer’s / Seller’s Signature Date/Time AM PM Buyer’s / Seller’s Signature Date/Time AM PMX__________________________________________ X__________________________________________ Buyer’s / Seller’s Signature Date/Time AM PM Buyer’s / Seller’s Signature Date/Time AM PM

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