Key Takeaways
- Connecticut follows the Statute of Frauds requiring real estate contracts to be in writing
- Valid contracts require offer, acceptance, consideration, legal capacity, and lawful purpose
- Earnest money should be deposited into the broker's escrow account within specified timeframes
- Attorney review clauses are common in Connecticut real estate contracts
- The default brokerage commission is negotiable and should be clearly stated in listing agreements
Connecticut Contract Requirements
Connecticut real estate contracts must meet specific legal requirements to be valid and enforceable.
Statute of Frauds
Under Connecticut's Statute of Frauds, contracts for the sale of real property must be:
- In writing
- Signed by the party to be charged (or their authorized agent)
Key Point: Oral agreements to sell real estate are generally unenforceable in Connecticut.
Essential Elements of a Valid Contract
| Element | Description |
|---|---|
| Offer | Clear proposal with definite terms |
| Acceptance | Unequivocal agreement to the offer's terms |
| Consideration | Something of value exchanged (usually money) |
| Legal capacity | Parties must be competent to contract |
| Lawful purpose | Contract cannot be for illegal purposes |
| In writing | Required for real estate contracts |
Common Contract Forms
Connecticut real estate professionals typically use:
| Form | Use |
|---|---|
| Residential Purchase Agreement | Standard home purchase |
| Commercial Contract | Business property transactions |
| Lease Agreement | Rental property |
| Exclusive Right to Sell | Listing agreement for sellers |
| Buyer Agency Agreement | Buyer representation |
Attorney Review Clause
Connecticut contracts commonly include an attorney review clause:
| Feature | Description |
|---|---|
| Purpose | Allow attorneys to review and modify contract |
| Typical period | 3-5 days |
| Effect | Either party can cancel during review period |
| Modification | Attorneys may propose changes |
Practice Note: Attorney involvement is common in Connecticut real estate transactions.
Earnest Money
Earnest money (also called a good faith deposit) shows the buyer's serious intent:
Handling Requirements
| Requirement | Details |
|---|---|
| Deposit timeline | As specified in contract (typically within 3-5 business days) |
| Where deposited | Broker's escrow account |
| Who holds | Broker (not salesperson) |
| Disbursement | Per contract terms or mutual agreement |
Deposit Amounts
| Typical Range | Percentage |
|---|---|
| Minimum | 1-3% of purchase price |
| Common | 3-5% of purchase price |
| Competitive markets | Higher amounts may be requested |
Common Contract Contingencies
Contingencies allow parties to exit the contract if certain conditions aren't met:
Financing Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can cancel if financing not obtained |
| Deadline | Must apply for loan within specified days |
| Documentation | May require denial letter from lender |
Inspection Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can inspect property and negotiate repairs |
| Timeline | Inspection period specified in contract (typically 7-14 days) |
| Options | Accept, negotiate repairs, or cancel |
Appraisal Contingency
| Element | Details |
|---|---|
| Purpose | Protects buyer if property appraises below price |
| Options | Seller reduce price, buyer pay difference, or cancel |
Home Sale Contingency
| Element | Details |
|---|---|
| Purpose | Buyer must sell existing home first |
| Kick-out clause | Seller may accept other offers |
Time is of the Essence
Many Connecticut real estate contracts include a "time is of the essence" clause:
- Deadlines are strict and legally binding
- Missing a deadline may constitute breach
- Extensions require written agreement
Exam Tip: Understand the difference between an executory contract (not yet performed) and an executed contract (fully performed).
Under Connecticut's Statute of Frauds, which statement is TRUE about real estate contracts?
What is the purpose of an attorney review clause in a Connecticut real estate contract?