Key Takeaways
- Mississippi follows the Statute of Frauds requiring real estate contracts to be in writing and signed
- Valid contracts require offer, acceptance, consideration, legal capacity, and lawful purpose
- Earnest money should be deposited into the broker's trust account within specified timeframes
- Mississippi uses standardized contract forms approved by the Mississippi Association of Realtors
- Contingencies (financing, inspection, appraisal) must be clearly specified in the contract
Mississippi Contract Requirements
Mississippi real estate contracts must meet specific legal requirements to be valid and enforceable.
Statute of Frauds
Under Mississippi'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 Mississippi.
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
Mississippi real estate professionals typically use:
| Form | Use |
|---|---|
| Residential Purchase Agreement | Standard purchase agreement |
| Commercial Contract | Business property transactions |
| Lease Agreement | Rental property |
| Exclusive Right to Sell Listing | Seller representation |
| Buyer Agency Agreement | Buyer representation |
Note: The Mississippi Association of Realtors provides standardized forms used by most licensees.
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 2-3 business days) |
| Where deposited | Broker's trust account |
| Who holds | Broker (not salesperson) |
| Disbursement | Per contract terms or mutual agreement |
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 |
| Good faith | Buyer must make good faith effort to obtain financing |
| 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 |
| Professional inspection | Buyer typically hires licensed inspector |
Appraisal Contingency
| Element | Details |
|---|---|
| Purpose | Protects buyer if property appraises below price |
| Lender requirement | Most lenders require appraisal |
| 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
Many Mississippi 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 Mississippi's Statute of Frauds, which statement is TRUE about real estate contracts?
Where should earnest money be deposited in a Mississippi real estate transaction?