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FTC CAN SPAM Rule Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 For real estate professionals and REALTOR® associations,

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Presentation on theme: "FTC CAN SPAM Rule Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 For real estate professionals and REALTOR® associations,"— Presentation transcript:

1 FTC CAN SPAM Rule Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 For real estate professionals and REALTOR® associations, the relevant provisions of the Act require that all commercial electronic mail messages contain the following: (1) a legitimate return e-mail and physical postal address; (1) a legitimate return e-mail and physical postal address; (2) a clear and conspicuous notice of the recipient's opportunity to "opt-out," or decline to receive any future messages; (2) a clear and conspicuous notice of the recipient's opportunity to "opt-out," or decline to receive any future messages; (3) opt out mechanism active for at least 30 days after message transmission; and (3) opt out mechanism active for at least 30 days after message transmission; and (4) clear and conspicuous notice that the message is an advertisement or solicitation. (4) clear and conspicuous notice that the message is an advertisement or solicitation.

2 Do Not Call Update Are you using Do Not Call Sentry? Are you using Do Not Call Sentry? Why would you want to? To comply with federal law and to avoid a potential $11,000 fine per call made to someone on the Do Not Call Registry! Why would you want to? To comply with federal law and to avoid a potential $11,000 fine per call made to someone on the Do Not Call Registry!

3 Addendum for “Back-Up” Contract When does the option period begin? When the contract is fully executed and the agent for the last party to sign has delivered notice of acceptance of the last offer without any revisions to the other agent, that date of notice of acceptance is the effective date of the back-up contract and the option period begins immediately. When and if the back-up contract rolls into first place, the effective date is amended to the date of notice of the termination of the first place contract, and the counting then begins for the counting of days as specified in paragraphs 6 and 23 of the contract, as well as any addenda which count days. When does the option period begin? When the contract is fully executed and the agent for the last party to sign has delivered notice of acceptance of the last offer without any revisions to the other agent, that date of notice of acceptance is the effective date of the back-up contract and the option period begins immediately. When and if the back-up contract rolls into first place, the effective date is amended to the date of notice of the termination of the first place contract, and the counting then begins for the counting of days as specified in paragraphs 6 and 23 of the contract, as well as any addenda which count days. When is the option fee for a back-up contract given to the seller? No later than the effective date. Seller should cash it immediately. The option fee on a back-up contract is non-refundable. When is the option fee for a back-up contract given to the seller? No later than the effective date. Seller should cash it immediately. The option fee on a back-up contract is non-refundable. When are the earnest money and the back-up contract escrowed with the title company? As soon as the contract is fully executed. When are the earnest money and the back-up contract escrowed with the title company? As soon as the contract is fully executed.

4 Know Your “Bad Words” Be familiar with the “Bad Words” list on the GK Intranet site. Know what you cannot say in MLS remarks or on housesheets or in brochures. Be familiar with the “Bad Words” list on the GK Intranet site. Know what you cannot say in MLS remarks or on housesheets or in brochures.

5 GK policy and the ICA require that office files be complete “In any transaction related to Broker’s real estate business in which Associate is involved, Associate must maintain a file a Broker’s office that contains all documents, contracts, agreements, disclosures, correspondence, data, and other information related to the transaction.” TAR Independent Contractor Agreement, paragraph 10 “In any transaction related to Broker’s real estate business in which Associate is involved, Associate must maintain a file a Broker’s office that contains all documents, contracts, agreements, disclosures, correspondence, data, and other information related to the transaction.” TAR Independent Contractor Agreement, paragraph 10

6 Why You Should Care That “Every Little Thing” in a Contract is Initialed and/or Signed By All Parties It’s GK policy. But why? It’s GK policy. But why?

7 Statute of Frauds This law requires that an agreement for the sale of real estate must be in writing. This law requires that an agreement for the sale of real estate must be in writing.

8 “Meeting of the Minds” The contract itself is the best evidence that: The contract itself is the best evidence that: 1) the parties have reached an agreement, and 1) the parties have reached an agreement, and 2) what the terms of that agreement are. 2) what the terms of that agreement are.

9 Our Contracts Should Leave No Question About What the Parties’ Agreement Is Our contracts are typically done as “unilateral” offers, where one party makes an offer, and the other party then accepts it or counteroffers with their own “unilateral” offer. Frequently, this practice is manifested by several back and forth passes of the original contract form, which has been re-worked with strike-outs, initials, and additions of text in one or more persons’ hand writing. Our contracts are typically done as “unilateral” offers, where one party makes an offer, and the other party then accepts it or counteroffers with their own “unilateral” offer. Frequently, this practice is manifested by several back and forth passes of the original contract form, which has been re-worked with strike-outs, initials, and additions of text in one or more persons’ hand writing.

10 Counter-offers are Rejections of the Prior Offer Every time there is a counter-offer, it’s a rejection of the prior offer, and there’s no contract until the parties have agreed on all terms. This necessarily creates a huge responsibility for accurate documentation of the proposed agreement as it is passes back and forth by the parties. Every time there is a counter-offer, it’s a rejection of the prior offer, and there’s no contract until the parties have agreed on all terms. This necessarily creates a huge responsibility for accurate documentation of the proposed agreement as it is passes back and forth by the parties.

11 Offer and Acceptance When a unilateral offer is made and accepted without change, then you finally have a contract. When a unilateral offer is made and accepted without change, then you finally have a contract.

12 Parol Evidence Rule “The parol evidence rule provides that where parties to an agreement commit their undertakings to a writing with the intention that it shall formally and comprehensively evidence the terms of their agreement, the writing, when executed by the parties, cannot thereafter be made subject to parol alteration, contradiction or variance by way of agreements or understandings had prior to or contemporaneously with the execution of the writing.” “The parol evidence rule provides that where parties to an agreement commit their undertakings to a writing with the intention that it shall formally and comprehensively evidence the terms of their agreement, the writing, when executed by the parties, cannot thereafter be made subject to parol alteration, contradiction or variance by way of agreements or understandings had prior to or contemporaneously with the execution of the writing.” International Milling Co. v. Hachmeister, Inc. Supreme Court of Pennsylvania, 1955. 380 Pa. 407, 110 A. 2 nd. 186 International Milling Co. v. Hachmeister, Inc. Supreme Court of Pennsylvania, 1955. 380 Pa. 407, 110 A. 2 nd. 186

13 Recognize This? Paragraph 22 of the 1-4 Family Residential Contract form begins as follows: Paragraph 22 of the 1-4 Family Residential Contract form begins as follows: “22. Agreement of Parties. This contract contains the entire agreement of the parties and cannot be changed except by their written agreement.” “22. Agreement of Parties. This contract contains the entire agreement of the parties and cannot be changed except by their written agreement.”

14 The Parol Evidence Rule in Action It is clearly the intent of the TREC promulgated contract form, and of the parties using it, that the contract contains their entire agreement, and that no additional circumstances outside the contract itself should be considered. If some term of the contract is arguably not agreed to by both parties (ie not initialed or signed off on by both parties), can the contract be undone? It is clearly the intent of the TREC promulgated contract form, and of the parties using it, that the contract contains their entire agreement, and that no additional circumstances outside the contract itself should be considered. If some term of the contract is arguably not agreed to by both parties (ie not initialed or signed off on by both parties), can the contract be undone?

15 Texas Law The interpretation of the contract is construed against the drafting party. The interpretation of the contract is construed against the drafting party. If there is a handwritten portion of the contract which is in conflict with the printed portion, the handwritten portion will control. However, if the handwritten provision is not initialed by all parties, it will create a “fact” question, which will be left up to the finder of fact to determine what the parties really meant. If there is a handwritten portion of the contract which is in conflict with the printed portion, the handwritten portion will control. However, if the handwritten provision is not initialed by all parties, it will create a “fact” question, which will be left up to the finder of fact to determine what the parties really meant.

16 Worst Case Scenario Picture this. A contract is escrowed missing some initials or signatures. One party decides they no longer want to be held to the contract, or the application and interpretation of the un- initialed provision becomes critical to the contract. Both sides lawyer up, and spend loads of money and time litigating the contract. Guess who gets deposed and is asked to testify at trial? And ultimately, a court could find that there is no contract. Picture this. A contract is escrowed missing some initials or signatures. One party decides they no longer want to be held to the contract, or the application and interpretation of the un- initialed provision becomes critical to the contract. Both sides lawyer up, and spend loads of money and time litigating the contract. Guess who gets deposed and is asked to testify at trial? And ultimately, a court could find that there is no contract.

17 Contracts Are Our Business The contract is clearly the most important document in a real estate transaction. While our clients may only sell and/or buy a few homes in their lifetimes, we, as agents, deal with residential real estate contracts every day. Our clients expect us to bring our experience and our professionalism to the deal – that’s why they hired us in the first place. The contract is clearly the most important document in a real estate transaction. While our clients may only sell and/or buy a few homes in their lifetimes, we, as agents, deal with residential real estate contracts every day. Our clients expect us to bring our experience and our professionalism to the deal – that’s why they hired us in the first place.

18 Review Each Contract Carefully Make sure it is fully executed. If it’s not, take care of it immediately – before it is escrowed! Make sure it is fully executed. If it’s not, take care of it immediately – before it is escrowed! Make sure it is initialed in all necessary places (at the bottom of each page, and any place where there is an insertion, deletion, or handwritten entry.) If initials are missing, get them – before it is escrowed! Make sure it is initialed in all necessary places (at the bottom of each page, and any place where there is an insertion, deletion, or handwritten entry.) If initials are missing, get them – before it is escrowed! Make sure the effective date is filled in before the contract is sent to the title company. Make sure the effective date is filled in before the contract is sent to the title company.

19 To Minimize Confusion, Messiness, and Possible Legal Entanglements If you represent the seller, you are strongly urged to use the “Seller’s Invitation to Buyer to Submit New Offer” instead of having the seller counter back on a marked- up contract. If you represent the seller, you are strongly urged to use the “Seller’s Invitation to Buyer to Submit New Offer” instead of having the seller counter back on a marked- up contract. If you represent the buyer and receive either a “Seller’s Invitation” form or a marked-up contract counteroffer from the seller, prepare a brand-new contract for your buyers to use as their new unilateral offer. If you represent the buyer and receive either a “Seller’s Invitation” form or a marked-up contract counteroffer from the seller, prepare a brand-new contract for your buyers to use as their new unilateral offer. When one or both of the parties are out of town, to reduce the difficulties related to “fax of fax of fax” versions of the contract, when you represent the buyer prepare a new contract form each go-round and email in ZipForm to your client, who can then fax it back. When one or both of the parties are out of town, to reduce the difficulties related to “fax of fax of fax” versions of the contract, when you represent the buyer prepare a new contract form each go-round and email in ZipForm to your client, who can then fax it back.


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