Does the Reversal in Steiner Confirm the Enforceability of Real Estate Purchase and Sale Contracts?
Both prongs of the analysis are relevant to whether purchase and sale agreements generally used in the real estate industry, which include rights of buyers to terminate unilaterally, are enforceable. The Court distinguished the agreement in Steiner, which allowed the buyer to terminate at any time for any reason, from the “common form of real estate contract” pursuant to which “withdrawal from such a contract is permitted only if the contingency fails.” The Court summarily concluded that “bilateral contracts subject to a contingency, which are widely used in real estate transactions, are not affected by our holding.” The Court is essentially indicating that under customary real estate contracts, the buyer’s obligation to buy is not illusory since the obligation is subject only to the failure of specified contingencies. However, it is unclear whether including certain types of contingencies may result in a contract being deemed an option revocable by the seller. While the Court acknowle
