Key Takeaways
- Oklahoma 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 must be deposited by the end of the third banking day following acceptance
- OREC provides standardized contract forms for Oklahoma real estate transactions
- Time is of the essence clauses make contract deadlines strictly enforceable
Oklahoma Contract Requirements
Oklahoma real estate contracts must meet specific legal requirements to be valid and enforceable.
Statute of Frauds
Under Oklahoma'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 Oklahoma.
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 |
OREC Standard Contract Forms
The Oklahoma Real Estate Commission provides standardized contract forms used in most transactions:
| Form | Use |
|---|---|
| Residential Sale Contract | Standard purchase agreement for homes |
| Buyer Broker Service Agreement | Buyer representation |
| Listing Agreement | Seller representation |
| Various Addenda | Special provisions and contingencies |
Note: OREC's Contract Form Committee regularly updates these forms. Using current approved forms is important for compliance.
Earnest Money
Earnest money (also called a good faith deposit) shows the buyer's serious intent:
Handling Requirements
| Requirement | Oklahoma Rule |
|---|---|
| Deposit deadline | End of third banking day following acceptance |
| Where deposited | Broker's trust/escrow account |
| Who holds | Broker (not sales associate) |
| Disbursement | Per contract terms or mutual written agreement |
Important: Unless otherwise agreed in writing by all parties, earnest money must be deposited within 3 banking days of offer acceptance.
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 |
| 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 |
Termination of Contracts
Contracts may be terminated by:
| Method | Description |
|---|---|
| Performance | Both parties fulfill obligations |
| Mutual agreement | Both parties agree to cancel |
| Contingency not met | Condition specified in contract fails |
| Breach | One party fails to perform |
| Impossibility | Performance becomes impossible |
Time is of the Essence
Oklahoma real estate contracts typically include a "time is of the essence" clause:
- Deadlines are strict and legally binding
- Missing a deadline may constitute breach
- Extensions require written agreement from all parties
Exam Tip: Understand the difference between an executory contract (not yet performed) and an executed contract (fully performed).
Contract Disputes and Earnest Money
When disputes arise over earnest money:
| Resolution Method | Description |
|---|---|
| Written release | Both buyer and seller agree in writing |
| Mediation | Parties reach agreement through mediation |
| Interpleader | Broker deposits funds with court for decision |
Key Point: The broker holds earnest money until a written release is executed or agreement is reached through mediation.
Under Oklahoma's Statute of Frauds, which statement is TRUE about real estate contracts?
By when must earnest money be deposited in Oklahoma?