Title Stream

HOW TO STAY OUT OF TROUBLE IN A TROUBLED WORLD

Title Stream

APPENDIX: Purchase Agreement - pg.9 | White Vs. Strange Case - pg. 18

Defining Trouble

1. Trouble as a Licensee a. Fees, fines, suspension of license 2. Trouble with liability to clients 3. Trouble with the “deal” a. Keeping buyers and sellers under contract through to Act of Sale 4. Keeping your clients out of trouble

Relationship Between Real Estate Agents and Buyers/Sellers

1. Agent or Mandatary? a. Mandate is a contract by which a person, the principal, confers authority on another person, the mandatary, to transact one or more affairs for the principal. La Civ Code art. 2989

b. Real Estate Agents i. A real estate “agent” as that term is used in real estate law, particularly the Louisiana Licensing Law is a “licensee acting under the provisions of this Chapter in a real estate transaction,” meaning someone licensed to conduct real estate activity in Louisiana. La R.S. 37:1431 ii. For example, a agent in the case of a listing agreement, can be compared to an employee. The agent accepts the “job of selling his “employer’s” (the owner’s) property, but the agent has no legal authority to bind the owner. His true “job” is to find eomeone to buy, not to act for the owner and actually transfer the property by signing the act of sale.

2. Mandate (Power of Attorney) a. The contract of mandate is not required to be in any particular form. Nevertheless, when the law prescribes a certain form for an act, a mandate authorizing the act must be in that form. La Civ Code art. 2993 b. Example: Power of attorney granting the mandatary the authority to transfer title to real estate is required to be in the same form as the act of sale authentic act

1 Listing Agreements

Three types:

1. NonExclusive Listing Agreement a. Owner of real estate may place it in the hands of as many brokers as he sees fit, and several brokers are employed. The one who produces a customer and is the “procuring cause” of the sale is entitled to the commission.

2. Exclusive Agency a. Precludes the owner from employing other brokers during the term of the listing agreement but does not preclude the owner from selling the property himself.

3. Exclusive Right to Sell – Standard form used by Brokerages a. Entitles the broker to commissions on all sales during the life of the contract including those made by the owner regardless of the agent’s role as procuring cause, absent any exclusions b. If the owner has been negotiating with prospective purchasers before engaging a broker, the owner should specifically list those prospective purchasers as exclusions from the listing agreement that gives the broker exclusive right to sell.

Duty of Care

Every act whatever of man that causes damage to another obliges him by whose fault it happened to repair it. LA Civil Code art. 2315

Every person is responsible for the damage he occasions not merely by his act, but by his negligence, his imprudence, or his want of skill. LA Civil Code art. 2316

Example: Negligent Misrepresentation Buyers were aware of a prior termite infestation, but they were assured by the real estate agent that the rest of the house, other than the attic, which was indicated on the report, was structurally sound. It would be a question of fact as to whether the real estate agent had negligently misrepresented to buyer the amount of damage which had been caused to the home by termites.

Example: Buyer has the duty to inspect the property before the deadline. If the buyer misses the inspection deadline and later wants to back out of the contract due to a condition of the property that he should have ascertained, the agent might be in breach of the duty of care in making sure the buyer understands the terms of the purchase agreement.

2 Detrimental Reliance

A party may be obligated by a promise when he knew or should have known that the promise would induce the other party to rely on it to his detriment and the other party was reasonable in so relying. Recovery may be limited to the expenses incurred or the damages suffered as a result of the promisee's reliance on the promise. Reliance on a gratuitous promise made without required formalities is not reasonable. LA Civil Code art. 1967

Example: Inspections and Due Diligence – Agent hires inspector (for account of Buyer); agent deals exclusively with inspector; agent get inspection report and deals with repair issues; response to Seller, etc

Disclosures

1. Seller’s duty to disclose a. Seller of residential real property must furnish purchasers with a Property Disclosure Document, which may be in the form promulgated by the LREC or another form that contains substantially the same information.

2. Buyer’s rights and Seller's consequences for failure to disclose a. If the property disclosure document is not delivered until after purchaser makes an offer, purchaser can terminate any resulting real estate contract or withdraw the offer for up to 72 hours after receipt of the disclosure. This termination or withdrawal will always be without penalty to purchaser and any deposit must be promptly returned to purchaser (despite any agreement to the contrary)

3. Duties of Real Estate Licensees and Consequences for failure to fulfill duties a. Agents are not liable for error, inaccuracy, or omission in a disclosure, unless the agent has actual knowledge of the error, inaccuracy, or omission b. Agents are required by law to inform clients of their duties and rights in connection with Property Disclosures

Purchase Agreement

1. Duty of licensee to use purchase agreement forms (LA R.S. 37:1449.1) a. No licensee shall alter the purchase agreement form; however, addendums or amendments to the purchase agreement form may be utilized

3 i. This prohibits handwriting and initialing outside of the blank spaces ii. Initialing the provided lines at the bottom of each page is important to prevent a “slip page.”

2. Writing an effective offer a. Purchase agreements should be filled out completely, leaving no blanks (write N/A if blanks do not apply) b. Purchase agreement must be signed by all owners (sellers) and all buyers. c. Information gathering is key to avoiding future problems i. Obtain copy of the act vesting title to the current owners 1. Helpful in determining legal description ii. Obtain information on owners’ and their status 1. Individuals a. Single/Married/Divorced b. Dead, alive, interdicted, bankrupt 2. Legal Entities a. Who has authority to bind the entity?

3. Property Description a. Legal Description of property being sold b. Listing of movables included in sale i. Include on lines 20 – 22 if being transferred to buyer with no value ii. Include on lines 27 – 28 if being excluded from the transfer iii. Include on lines 288 293 if being transferred to buyer, but part of consideration for the purchase price

4. Deadlines, Dates, and Times

a. Date of Contract (Line 3)

b. Act of Sale (Lines 38 42) i. to be executed before settlement agent or Notary to be chosen by Buyer, on (date) ii. Any change of date must be mutually agreed upon in writing and signed by Seller and Buyer.

c. Financed Sale i. Buyer to make written loan application no later than days after date of acceptance (Line 73)

4 d. Leases/Special Assessments (Lines 138 143) i. Sale is conditioned upon Buyer’s receipt of copy of all written leases, excluding mineral leases, and unpaid special assessments from Seller within 5 calendar days of acceptance… Buyer will have 5 calendar days after receipt of aforementioned documents to notify Seller whether they are acceptable to Buyer. e. Inspection and Due Diligence Period (Lines 150 187) i. Line 157 Inspection period of calendar days from first day after acceptance ii. Line 172 Buyer’s option to request remedies of deficiencies from seller in writing gives seller 72 hours to respond iii. Lines 175 182 Additional 72 hours from date of seller’s response or date seller’s response was due, for buyer to a) accept Seller’s response, b) accept property in current condition, or c) elect to terminate agreement f. Private Water/Sewerage (Lines 191 199) i. See new sewer/private water addendum g. Merchantable Title/Curative Work (Lines 230 240) i. If curative work is required, the parties agree to extend closing date to a date not more than calendar days from date of Act of Sale stated herein. h. Final Walk Through (Lines 242 246) i. Buyer’s right to reinspect property within 5 days prior to Act of Sale, or Occupancy to determine if Property is in same or better condition and insure all agreed upon repairs have been completed. ii. Seller agrees to provide utilities and immediate access to property. iii. How to avoid trouble is it better to reinspect property 5 days prior to closing, 1 day prior, or 1 hour prior to closing?

5 There could be advantages and disadvantages on case by case basis

i. Deadlines (Lines 284 286) i. All “calendar days,” as used in this agreement, end at 11:59 in Louisiana.

j. Expiration of Offer (Lines 351 354) i. This offer is binding and irrevocable until

k. Acceptance, Rejection, Counter Offer (Lines 374 391) i. Date and time of acceptance or counter offer controls some of the other deadlines within the agreement.

5. Inspection and Due Diligence Period (Lines 150- 187) a. Within Inspection period, if buyer is not satisfied, he may terminate agreement or indicate in writing the deficiencies and desired remedies. b. Seller will then have 72 hours to respond in writing as to Seller’s willingness to remedy deficiencies c. Buyer has 72 hours from time of seller’s response or 72 hours from time that seller’s response was due to: i. accept seller’s response ii. accept the property in its current condition; or iii. elect to terminate the agreement d. Example: Parties enter into Purchase Agreement which contains special provisions clause that states: “any single mechanical item repair that exceeds $2,000.00 the seller has the option to repair or the contract will be null and void.” Inspector found over $25,000.00 in required repairs. Seller refused to make repairs. Parties argued over who had the option to terminate the contract. The court said neither party had that right because the clause contained a condition, not an option, and once the condition was fulfilled (repair over $2,000.00 that seller would not fix) the contract automatically became null. Campbell v. Melton, 20012578 (La. 5/14/02) 817 So.2d 69. e. If buyer fails to make inspections or fails to give written notice of deficiencies and desired remedies to Seller (or seller’s designated agent) within the inspection period, it should be deemed as acceptance by the Buyer of the property’s current condition. f. How agents can avoid trouble: Make sure to thoroughly explain inspection process to clients, and make sure that they understand. This is an extremely important part of the contract that agents are familiar with, but may not be fully understood by buyers or sellers.

6. Warranty or as is Clause with Waiver of Right of Redhibition (Lines 212 229)

6 a. This portion requires an election to be made. To understand these clauses there must first be a discussion of what Louisiana law is as to warranty in a sale. These general rules have an exception, that is the new home warranties. b. In every sale in Louisiana, including sale of real estate, the Seller by default, and unless changed by contract, warrants two things regarding condition of the Property: i. That the thing sold is free from redhibitory defects; and ii. That the thing is fit for its intended use c. Redhibitory defects are those that are (a) not apparent or visible or (b) cannot be discovered with simple inspections. Stated another way, Louisiana law is to the effect that if a defect is observable or could have been discovered upon simple inspection, it is not a redhibitory defect and the Buyer buys the property with those defects and they are the Buyer’s problem. (If the Seller knows of the defects and conceals them other problems can arise). So the law on redhibitory defects assumes that there is a defect that cannot be discovered easily or is not readily observable so that neither the Buyer nor the Seller knows about them. If such defects are discovered after the sale within the time period set by law then the Buyer has recourse against the Seller for a reduction in the purchase price (generally the amount to cure the defect), or, if the defects are monumental, then the Buyer may in fact be entitled to rescind the sale, that is transfer the property back in return for a full refund of the full purchase price. Instances of the latter are very rare, but the right does exist. The warranty of fitness for intended use does not arise very often in the residential real estate context since the intended use is “residential” and whether the property is fit for that use is generally readily apparent. Election (A) Sale with Warranties; If this election is made the Seller is selling the property with all the warranties discussed above. To restate, there is no warranty by the Seller as to apparent or easily discoverable defects. The warranty applies only to those that are hidden or, as the law calls them redhibitory redhibitory defects. Election (B) Sale “As Is” Without Warranties. Electing this clause will relieve the Seller of the warranty against redhibitory defects. If this election is made, the Buyer’s inspections now become much more important and Buyers should be alerted that if this election is made the Seller will not be liable for any hidden or redhibitory defects. Election ( C ) New Home Warranties. The New Home Warranty Act supersedes the general rules of warranty that apply to elections A and B. The New Home Warranty Act sets forth in very specific detail what warranties are made, the time periods for liability of the Seller and the time period that those warranties last. This course will not go into the details and nuances of the New Home Warranty Act as that is a seminar in itself.

7. Default of Agreement by Seller (Lines 248 – 257) a. Seller is not liable for default if agreement is cancelled for the reasons set forth in: i. Lines 113 – 136 Return of the Deposit; or ii. Lines 230 – 240 Failure of Merchantable title

7 b. For any other default by seller, the buyer reserves the right to demand and/or sue for any of the following: i. Termination of the Agreement ii. Specific Performance 1. Force the seller to sell under terms and conditions of purchase agreement. 2. This election is rarely made iii. Termination of the Agreement in an amount equal to 10% of the sales price as stipulated damages 1. This allows buyer to make the demand and, if necessary, sue and not have to prove actual damages because the parties have agreed to the amount for damages. c. In all circumstances, the buyer is entitled to return of the deposit. Further, the prevailing party to any litigation brought to enforce the agreement shall be awarded attorney fees and costs. The seller may also be liable for broker fees.

8. Default of Agreement by Buyer (Lines 259 – 267) a. Mirror image of the rights granted to buyer if seller defaults b. Seller retains deposit

Review of Case: White vs Strange

8 ______Listing Firm Selling Firm

______□ ______Seller’s Designated Agent Name & License Number Dual Agent Buyer’s Designated Agent Name & License Number

______Brokerage Firm or Broker Name & License Number Brokerage Firm or Broker Name & License Number

______Phone Number Office Fax Phone Number Office Fax

______Email Address Email Address

______Delivered by Designated Agent to Day Date Time AM/PM

______Comments

______Received by Designated Agent Day Date Time AM/PM

1 LOUISIANA RESIDENTIAL AGREEMENT TO BUY OR SELL 2 3 Date: ______4 5 PROPERTY DESCRIPTION: I/We offer and agree to Buy/Sell the property at: 6 (Municipal Address) ______7 City ______; Zip ______; Parish ______; Louisiana, 8 (Legal Description)______9 on lands and grounds measuring approximately ______10 or as per record title; including all buildings, structures, component parts, and all installed, built-in, permanently 11 attached improvements, together with all fences, security systems, all installed speakers or installed sound 12 systems, all landscaping, all outside TV antennas, all satellite dishes, all installed and/or built-in appliances, all 13 ceiling fans, all air conditioning or heating systems including window units, all bathroom mirrors, all window 14 coverings, blinds and associated hardware, all shutters, all flooring, all carpeting, all cabinet tops, all cabinet 15 knobs or handles, all doors, all door knobs or handles, all windows, all roofing, all electrical systems, and all 16 installed lighting fixtures, chandeliers and associated hardware, other constructions permanently attached to the 17 ground. If owned by the SELLER prior to date of this Agreement, standing timber, unharvested crops and 18 ungathered fruits of trees on the property shall be conveyed to the BUYER. The following movable items here 19 remain with the property, but are not to be considered as part of the Sale Price and have no value: ______20 ______21 ______22 ______. 23 All items listed herein are included in the property sold no matter how they are attached or installed, provided that 24 any or all of these items are in place at the time of signing of this Agreement to Buy or Sell (the 25 “Agreement”),unless otherwise stated herein. (All of the above contained in lines 5 through 22 are collectively 26 referred to herein as the “Property.”) The following items are excluded from the Property sold: 27 ______28 ______.

BUYER’S Initials ______Page 1 of 9 SELLER’S Initials ______

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29 MINERAL RIGHTS: If the SELLER transfers any mineral rights, they are to be transferred without warranty. 30 ______% mineral rights owned by the SELLER are to be reserved by the SELLER and the SELLER shall waive 31 any right to use the surface for any such reserved mineral activity or use. 32 33 PRICE: The Property will be sold and purchased subject to title and zoning restrictions, servitudes of record, and 34 law or ordinances affecting the Property for the sum of ______35 ______Dollars ($______) (the “Sale Price”). 36 37 ACT OF SALE: The Act of Sale is to be executed before a settlement agent or Notary Public to be chosen by the 38 BUYER, on ______, 20_____, or before if mutually agreed upon. Any change of the date 39 for execution of the Act of Sale must be mutually agreed upon in writing and signed by the SELLER and the 40 BUYER. At closing, the BUYER must provide "good funds" as required by Louisiana statute LA R.S. 22:22.512 et 41 seq. 42 43 OCCUPANCY: Occupancy/possession and transfer of keys is to be granted at Act of Sale unless mutually agreed 44 upon in writing. 45 46 CONTINGENCY FOR SALE OF BUYER’S OTHER PROPERTY: 47 ␀ This sale is contingent on the sale of other property by the BUYER and the attached contingency clause 48 addendum shall apply. 49 ␀ This sale is not contingent upon the sale of other property by the BUYER nor is the loan needed by the 50 BUYER to obtain the Sale Price contingent on the BUYER’S sale of any property. 51 52 ␀ ALL CASH SALE: The BUYER warrants the BUYER has cash readily available to close the sale of this 53 Property. 54 ␀ FINANCED SALE: This sale is conditioned upon the ability of BUYER to borrow with this Property as security 55 for the loan the sum of $______or _____% of the Sale 56 Price by a mortgage loan or loans at an initial interest rate not to exceed _____% per annum, interest and 57 principal, amortized over a period of not less than _____ years, payable in monthly installments or on any other 58 terms as may be acceptable to the BUYER provided that these terms do not increase the cost, fees or expenses 59 to the SELLER. The loan shall be secured by: 60 ␀ Fixed Rate Mortgage ␀ FHA Insured Mortgage 61 ␀ Adjustable Rate Mortgage ␀ Owner Financing 62 ␀ Rural Development ␀ Bond Financing 63 ␀ VA Guaranteed Mortgage ␀ Other ______64 65 The BUYER agrees to pay discount points not to exceed _____% of the loan amount. 66 Other financing conditions: ______67 ______68 ______. 69 70 The BUYER acknowledges and warrants that the BUYER has available the funds which may be required to 71 complete the sale of the Property including, but not limited to, the deposit, the down payment, closing costs, pre- 72 paid items, and other expenses. If this sale is a Financed Sale, BUYER acknowledges that any terms and 73 conditions imposed by BUYER’S lender(s) or by Consumer Financial Protection Bureau Requirements shall not

BUYER’S Initials ______Page 2 of 9 SELLER’S Initials ______

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74 affect or extend the BUYER’S obligation to execute the Act of Sale or otherwise affect any terms or conditions of 75 this Agreement except as otherwise set forth herein. The BUYER shall supply the SELLER written documentation 76 from a lender that a loan application has been made and the BUYER has given written authorization to lender to 77 proceed with the loan approval process within (____) calendar days after the date of acceptance of this offer by 78 both parties. If the BUYER fails to make loan application, and to supply SELLER with written documentation of 79 that application and BUYER’S written authorization for lender to proceed with loan process within this period, the 80 SELLER may, at the SELLER’S option, terminate this Agreement, by giving the BUYER written notice of the 81 SELLER’S termination. In the event the BUYER is not able to secure financing, the SELLER reserves the right to 82 provide all or part of mortgage loan(s) under the terms set forth above. 83 84 PRORATIONS/OTHER COSTS: Real estate taxes, flood insurance premium if assumed, rents, condominium 85 dues, assessments, and/or other dues owed to homeowners associations and the like for the current year are to 86 be prorated through the date of the Act of Sale. Act of Sale costs, abstracting costs, title search, title insurance 87 and other costs required to obtain financing, shall be paid by the BUYER, unless otherwise stated herein. All 88 necessary tax, mortgage, conveyance, release certificates or cancellations and the SELLER closing fees, if any, 89 shall be paid by the SELLER. The SELLER shall pay all previous years’ taxes, assessments, condominium dues, 90 and/or dues owed to homeowners associations and the like. All special assessments bearing against the 91 Property prior to Act of Sale, other than those to be assumed by written agreement, as of the date of the Act of 92 Sale, are to be paid by the SELLER. 93 94 APPRAISAL: ␀ This sale is NOT conditioned on appraisal. ␀ This sale IS conditioned on the appraisal of the 95 Property being not less than the Sale Price. The SELLER agrees to provide the utilities for appraisals and access. 96 If the appraised value of the Property is equal to or greater than the Sale Price, the BUYER shall pay the Sale 97 Price agreed upon prior to the appraisal. If the appraised value is less than the Sale Price, the BUYER shall 98 provide the SELLER with a copy of the appraisal within ______(____) calendar days of receipt of same, 99 along with the BUYER’S written request for the SELLER to reduce the Sale Price. Within ______(____) 100 calendar days after the SELLER’S receipt of such written documentation of the appraised value, the BUYER shall 101 have the option to pay the Sale Price agreed upon prior to the appraisal or to void this Agreement unless the 102 SELLER agrees in writing to reduce the Sale Price to the appraised value or all parties agree to a new Sale Price. 103 104 DEPOSIT: Upon acceptance of this offer, or any attached counter offer, the SELLER and the BUYER shall be 105 bound by all terms and conditions of this Agreement, and the BUYER or the BUYER’S agent shall deliver 106 immediately, upon notice of acceptance of the offer, the BUYER’S deposit (the “Deposit”) in the amount of 107 $______or _____% of the Sale Price to be paid in the form of: 108 □ Cash $______□ Promissory Note $______109 □ Check $______110 The Deposit shall be held by ______. 111 112 Failure to deliver the Deposit shall be considered a default of this Agreement. If the Deposit is held by a Broker, it 113 must be held in accordance with the rules of the Louisiana Real Estate Commission in a federally insured banking 114 or savings and loan institution without responsibility on the part of the Broker in the case of failure or suspension 115 of such institution. In the event the parties fail to execute an Act of Sale by date specified herein, and/or a dispute 116 arises as to ownership of, or entitlement to, the Deposit or funds held in escrow, the Broker shall abide by the 117 Rules and Regulations set forth by the Louisiana Real Estate Commission. 118 119 RETURN OF DEPOSIT: The Deposit shall be returned to the BUYER and this Agreement declared null and void 120 without demand in consequence of the following events:

BUYER’S Initials ______Page 3 of 9 SELLER’S Initials ______

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121 1) If this Agreement is declared null and void by the BUYER during the inspection and due diligence period as set 122 forth in lines 162 through 195 of this Agreement; 123 124 2) If this Agreement is subject to the BUYER’S ability to obtain a loan and the loan cannot be obtained, except as 125 stated in lines 70 through 82 of this Agreement, but only if the BUYER has made timely application for the loan 126 and made good faith efforts to obtain the loan; 127 128 3) If the BUYER conditions the Sale Price on an appraisal and the appraisal is less than the Sale Price and the 129 SELLER will not reduce the Sale Price as set forth in lines 94 through 102 of this Agreement; 130 131 4) If the BUYER timely terminates the Agreement after having received the leases or assessments, as set forth in 132 lines 143 through 148 of this Agreement; 133 134 5) If the SELLER is unable to timely deliver to the BUYER an approved sewerage and/or water inspection report 135 as set forth in lines 197 through 206. 136 137 6.) If the SELLER chooses not to repair or replace the sewer system(s) as per the SEPTIC/WATER WELL 138 ADDENDUM, and the BUYER terminates the agreement as a result thereof. 139 140 7.) If the SELLER chooses not to repair or replace the private water well system(s) as per the SEPTIC/WATER 141 WELL ADDENDUM, and the BUYER terminates the agreement as a result thereof. 142 143 LEASES/SPECIAL ASSESSMENTS: The sale is conditioned upon the BUYER'S receipt of a copy of all written 144 leases, excluding mineral leases, and unpaid special assessments from the SELLER within five (5) calendar days 145 of acceptance of the Agreement. Special assessments shall mean an assessment levied on Property to pay the 146 cost of local improvements imposed by local governmental/governing authority. The BUYER will have five (5) 147 calendar days after receipt of the aforementioned documents to notify the SELLER whether they are acceptable 148 to the BUYER. Security deposits, keys and leases are to be transferred to the BUYER at Act of Sale. 149 150 NEW HOME CONSTRUCTION: If the property to be sold is completed new construction, under construction, or to 151 be constructed, check one: 152 □ A new home construction addendum, with additional terms and conditions, is attached. 153 □ There is no new home construction addendum. 154 155 INSPECTION AND DUE DILIGENCE PERIOD: The BUYER ACKNOWLEDGES THAT THE SALE PRICE OF 156 THE PROPERTY WAS NEGOTIATED BASED UPON THE PROPERTY'S APPARENT CURRENT CONDITION; 157 ACCORDINGLY, the SELLER IS NOT OBLIGATED TO MAKE REPAIRS TO THE PROPERTY, INCLUDING 158 REPAIRS REQUIRED BY THE LENDER UNLESS OTHERWISE STATED HEREIN. THE SELLER IS 159 RESPONSIBLE FOR MAINTAINING THE PROPERTY IN SUBSTANTIALLY THE SAME OR BETTER 160 CONDITION AS IT WAS WHEN THE AGREEMENT WAS FULLY EXECUTED. 161 162 The BUYER shall have an inspection and due diligence period of (_____) calendar days, commencing the first 163 day after acceptance of this Agreement wherein, the BUYER may, at the BUYER’S expense, have any 164 inspections made by experts or others of his choosing. Such physical inspections may include, but are not limited 165 to, inspections for termites and other wood destroying insects, and/or damage from same, molds, and fungi 166 hazards, and analysis of synthetic stucco, drywall, appliances, structures, foundations, roof, heating, cooling, 167 electrical, plumbing systems, utility and sewer availability and condition, out-buildings, and square footage. Other 168 due diligence by the BUYER may include, but is not limited to investigation into the property’s school district, 169 insurability, flood zone classifications, current zoning and/or subdivision restrictive covenants and any items 170 addressed in the SELLER’S Property Disclosure Document. All testing shall be nondestructive testing. The 171 SELLER agrees to provide the utilities for inspections and immediate access. Inspection period will be extended

BUYER’S Initials ______Page 4 of 9 SELLER’S Initials ______

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172 by the same number of days that the BUYER is not granted immediate access to the property or all utilities are 173 not provided by the SELLER. If the BUYER is not satisfied with the condition of the Property or the results of the 174 BUYER’S due diligence investigation, the BUYER may choose one of the following options within the inspection 175 and due diligence period: 176 177 Option 1: The BUYER may elect, in writing, to terminate the Agreement and declare the Agreement null and void; 178 or 179 Option 2: The BUYER may indicate in writing the deficiencies and desired remedies and the SELLER will within 180 seventy two (72) hours respond in writing as to the SELLER’S willingness to remedy those deficiencies 181 (“SELLER’S Response”). 182 183 Should the SELLER in the SELLER’S Response refuse to remedy any or all of the deficiencies listed by the 184 BUYER, then the BUYER shall have seventy-two (72) hours from the date of the SELLER'S Response or 185 seventy-two (72) hours from the date that the SELLER'S Response was due, whichever is earlier, to: (a) accept 186 the SELLER'S Response to the BUYER’S written requests or (b) accept the Property in its current condition, or (c) 187 to elect to terminate this Agreement. The BUYER’S response shall be in writing. Upon the BUYER'S failure to 188 respond to the SELLER’S Response by the time specified or the BUYER’S electing, in writing, to terminate this 189 Agreement, the Agreement shall be automatically, with no further action required by either party, ipso facto null 190 and void except for return of Deposit to the BUYER. 191 192 FAILURE TO GIVE WRITTEN NOTICE OF EITHER TERMINATION OR DEFICIENCIES AND DESIRED 193 REMEDIES TO THE SELLER (OR THE SELLER’S DESIGNATED AGENT) AS SET FORTH IN LINES 155 194 THROUGH 181 WITHIN THE INSPECTION AND DUE DILIGENCE PERIOD SHALL BE DEEMED AS 195 ACCEPTANCE BY THE BUYER OF THE PROPERTY'S CURRENT CONDITION. 196 197 PRIVATE WATER/SEWERAGE: 198 □ There is/are ______(____) private water system(s) servicing only the primary residence, and the attached 199 private Septic/Water Addendum inspections shall include only the system(s) supplying service to the primary 200 residence. 201 202 □ There is/are ______(____) private septic/treatment system(s) servicing only the primary residence and 203 the attached private Septic/Water Addendum inspections shall include only those systems supplying service to 204 the primary residence. 205 206 □ There is NO private septic/treatment system(s) servicing only the primary residence. 207 208 HOME SERVICE/WARRANTY: A home service/warranty plan ␀ will / ␀ will not be purchased at the closing of 209 sale at a cost not to exceed $______to be paid by ␀ the BUYER / ␀ the SELLER. Home Service 210 Warranty will be ordered by ______. 211 212 It is understood that the Agent/Broker may receive compensation from the home warranty company for actual 213 services performed. The home service warranty plan does not warrant pre-existing defects and options, and does 214 not supersede or replace any other inspection clause or responsibilities. If neither the BUYER nor the SELLER 215 accepts the home service warranty plan, they declare that they have been made aware of the existence of such a 216 plan, and further declare that they hold the Broker and Agents harmless from any responsibility or liability due to 217 their rejection of such a plan.

BUYER’S Initials ______Page 5 of 9 SELLER’S Initials ______

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218 WARRANTY OR AS IS CLAUSE WITH WAIVER OF RIGHT OF REDHIBITION: (CHECK ONE ONLY) 219 ␀ A. SALE WITH WARRANTIES: The SELLER and the BUYER acknowledge that this sale shall be with full 220 SELLER warranties as to any claims or causes of action including but not limited to redhibition pursuant to 221 Louisiana Civil Code Article 2520, et seq. and Article 2541, et seq. 222 ␀ B. SALE “AS IS” WITHOUT WARRANTIES: The SELLER and the BUYER hereby acknowledge and recognize 223 that the Property being sold and purchased is to be transferred in “as is” condition and further the BUYER does 224 hereby waive, relieve and release the SELLER from any claims or causes of action for redhibition pursuant to 225 Louisiana Civil Code Article 2520, et seq. and Article 2541, et seq. or for reduction of Sale Price pursuant to 226 Louisiana Civil Code Article 2541, et seq. Additionally, the BUYER acknowledges that this sale is made without 227 warranty of fitness for ordinary or particular use pursuant to Louisiana Civil Code Article 2524. The SELLER and 228 the BUYER agree that this clause shall be made a part of the Act of Sale. 229 ␀ C. NEW HOME WARRANTIES. Notwithstanding lines 218 through 228 and irrespective of whether A or B 230 above is checked, if the Property is a new construction, the parties agree that neither A or B will apply but instead 231 the provisions of the New Home Warranty Act (LA R.S. 9:3141 et seq.) shall apply. The warranty of condition of 232 this Property is governed by the New Home Warranty Act if a home on the Property is a “home” as defined in the 233 New Home Warranty Act. 234 235 MERCHANTABLE TITLE/CURATIVE WORK: The SELLER shall deliver to the BUYER a merchantable title at 236 the SELLER’S costs (see lines 239 through 241). In the event curative work in connection with the title to the 237 Property is required or is a requirement for obtaining the loan(s) upon which this Agreement is conditioned, the 238 parties agree to and do extend the date for passing the Act of Sale to a date not more than 239 ______(_____) calendar days from the date of the Act of Sale stated herein. The 240 SELLER’S title shall be merchantable and free of all liens and encumbrances except those that can be satisfied at 241 Act of Sale. All costs and fees required to make title merchantable shall be paid by the SELLER. The SELLER 242 shall make good faith efforts to deliver merchantable title. The SELLER’S inability to deliver merchantable title 243 within the time stipulated herein shall render this Agreement null and void, reserving unto the BUYER the right to 244 demand the return of the Deposit and to recover from the SELLER actual costs incurred in processing of sale as 245 well as legal fees incurred by the BUYER. 246 247 FINAL WALK THROUGH: The BUYER shall have the right to re-inspect the Property within five (5) calendar 248 days prior to the Act of Sale, or occupancy, whichever will occur first in order to determine if the Property is in the 249 same or better condition as it was at the initial inspection(s) and to insure all agreed upon repairs have been 250 completed. The SELLER agrees to provide utilities for the final walk through and immediate access to the 251 Property. 252 253 DEFAULT OF AGREEMENT BY THE SELLER: In the event of any default of this Agreement by the SELLER, 254 the BUYER shall at the BUYER’S option have the right to declare this Agreement null and void with no further 255 demand, or to demand and/or sue for any of the following: 256 257 1) Termination of this Agreement; 2) Specific performance; 3) Termination of this Agreement and an amount 258 equal to 10% of the Sale Price as stipulated damages. 259 260 Further, the BUYER shall be entitled to the return of the Deposit. The prevailing party to any litigation brought to 261 enforce any provision of this Agreement shall be awarded their attorney fees and costs. The SELLER may also be 262 liable for Broker fees. 263 264 DEFAULT OF AGREEMENT BY BUYER: In the event of any default of this Agreement by the BUYER, the 265 SELLER shall have at the SELLER’S option the right to declare this Agreement null and void with no further

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266 demand, or to demand and sue for any of the following: 1) Termination of this Agreement; 2) Specific 267 performance; 3) Termination of this Agreement and an amount equal to 10% of the Sale Price as stipulated 268 damages. 269 270 Further, the SELLER shall be entitled to retain the Deposit. The prevailing party to any litigation brought to 271 enforce any provision of this Agreement shall be awarded their attorney fees and costs. The BUYER may also be 272 liable for Broker fees. 273 274 MOLD RELATED HAZARDS NOTICE: An informational pamphlet regarding common mold related hazards that 275 can affect real property is available at the EPA website http://www.epa.gov/iaq/molds/index.html. By initialing 276 this page of the Agreement, the BUYER acknowledges that the real estate agent has provided the BUYER with 277 the EPA website enabling the BUYER to obtain information regarding common mold related hazards. 278 279 OFFENDER NOTIFICATION: The Louisiana State Police maintains the State Sex Offender and Child Predator 280 Registry through the Louisiana Bureau of Criminal Identification and Information. It is a public access database of 281 the locations of individuals who are required to register pursuant to LA R.S. 15:540, et seq. The website for the 282 database is http://www.lsp.org/socpr/default.html. Sheriff and police departments serving jurisdictions of 283 450,000 also maintain such information. Inquiries can be made by phone at 1-800-858-0551 or 1-225-925-6100. 284 Send written inquiries to Post Office Box 66614, Box A-6, Baton Rouge, Louisiana 70896. 285 286 CHOICE OF LAW: This Agreement shall be governed by and shall be interpreted in accordance with the laws of 287 the State of Louisiana. 288 289 DEADLINES: TIME IS OF THE ESSENCE and all deadlines are final, except where modifications, changes, or 290 extensions are made in writing and signed by all parties to this Agreement. All “calendar days” as used in this 291 Agreement shall end at 11:59 p.m. in Louisiana. 292 293 ADDITIONAL TERMS AND CONDITIONS: 294 ______295 ______296 ______297 ______298 ______299 ______300 301 ROLES OF BROKERS AND DESIGNATED AGENTS: Broker(s) and Designated Agent(s) have acted only as 302 real estate brokers to bring the parties together and make no warranty to either party for performance or non 303 performance of any part of this Agreement or for any warranty of any nature unless specifically set forth in writing. 304 305 Broker(s) and Designated Agent(s) make no warranty or other assurances whatsoever concerning Property 306 measurements, square footage, room dimensions, lot size, Property lines or boundaries. Broker(s) and 307 Designated Agent(s) make no representations as to suitability or to a particular use of the Property, and the 308 BUYER has or will independently investigate all conditions and characteristics of the Property which are important 309 to the BUYER. The BUYER is not relying on the Broker or the Designated Agent(s) to choose a representative to 310 inspect or re-inspect the Property; the BUYER understands any representative desired by the BUYER may 311 perform this function. In the event Broker/Agent(s) provides names or sources for such advice or assistance, 312 Broker/Agent(s) does not warrant the services of such experts or their products and cannot warrant the condition 313 of Property or interest to be acquired, or guarantee that all defects are disclosed by the SELLER(S). 314 Broker/Agent(s) do not investigate the status of permits, zoning, code compliance, restrictive covenants, or

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315 insurability. The Broker(s) and Designated Agent(s) specifically make no warranty whatsoever as to whether or 316 not the Property is situated in or out of the Government’s hundred year flood plan or is or would be classified as 317 wetlands by the U.S. Army Corps of Engineers, or as to the presence of wood destroying insects or damage there 318 from. The BUYER(S) are to satisfy themselves concerning these issues. Designated Agent shall be an 319 independent contractor for Broker if the conditions as set forth in LA R.S. 37:1446(h) are met. 320 321 LIST ADDENDA TO BE ATTACHED AND MADE A PART OF THIS AGREEMENT: 322 □ Contingency for Sale of the BUYER’S Other Property Addendum □ Private Water/Sewerage Addendum 323 □ Condominium Addendum □ ______324 □ FHA Amendatory Clause □ ______325 □ New Construction Addendum □ ______326 327 If any of the pre-printed portions of this Agreement vary or are in conflict with any additional or modified terms on 328 blanks provided in this form or Addendum attached to this Agreement, the additional, modified or Addendum 329 provisions control. 330 331 SINGULAR – PLURAL USE: Wherever the word BUYER or the word SELLER occurs in this Agreement or is 332 referred to, the same shall be construed as singular or plural, masculine or feminine or neuter, as the case may 333 be. 334 335 ACCEPTANCE: Acceptance of this Agreement must be in writing. This agreement may be executed by use of 336 electronic signatures, in accordance with the Louisiana Uniform Electronic Transaction Act. The original of this 337 Agreement shall be delivered to the listing Broker’s firm. This Agreement and any supplement addendum or 338 modification relating hereto, including any photocopy, facsimile or electronic transmission thereof, may be 339 executed in two or more counterparts, all of which shall constitute one and the same Agreement. 340 341 NOTICES AND OTHER COMMUNICATIONS: All notices, requests, claims, demands, and other communications 342 related to or required by this Agreement shall be in writing. Notices permitted or required to be given (excluding 343 service of process) shall be deemed sufficient if delivered by (a) mail, (b) hand delivery; (c) overnight delivery; (d) 344 facsimile, (e) e-mail, or (f) other e-signature transmissions addressed to the respective addresses of the parties 345 as (a) written on the first page of this Agreement; (b) as designated below on lines 357 through 365; or (c) at such 346 other addresses as the respective parties may designate by written notice. 347 348 The BUYER and SELLER agree the use of electronic documents and digital signatures is acceptable and will be 349 treated as originals of the signatures and documents transmitted in the above referenced real estate transaction. 350 Specifically, the BUYER and SELLER consent to the use of electronic documents, the electronic transmission of 351 documents, and the use of electronic signatures pertaining to this Agreement, and any supplement addendum or 352 modification relating thereto, including but not limited to any notices, requests, claims, demands and other 353 communications as set forth in the Agreement. 354 ␀ The BUYER further authorizes notices and other communications to be delivered electronically to the following 355 address(es): 356 357 BUYER address(es): ______358 With a copy to: 359 BUYER’s Agent address(es): ______

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360 ␀ The SELLER further authorizes notices and other communications to be delivered electronically to the 361 following address(es): 362 363 SELLER address(es): ______364 With a copy to: 365 SELLER’s Agent address(es): ______366 CONTRACT: This is a legally binding contract when signed by both the SELLER and the BUYER. READ IT 367 CAREFULLY. If you do not understand the effect of any part of this Agreement seek legal advice before signing 368 this contract or attempting to enforce any obligation or remedy provided herein. 369 370 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement between the parties, and any other 371 agreements not incorporated herein in writing are void and of no force and effect. 372 373 EXPIRATION OF OFFER: 374 This offer is binding and irrevocable until ______, 20_____ at _____ AM PM MIDNIGHT NOON. 375 The Acceptance of this offer must be communicated to the offering party by the deadline stated on line 374 to be 376 binding and effective. 377 378 X______X______379 ␀ Buyer’s / ␀ Seller’s Signature Date/Time  AM  PM ␀ Buyer’s / ␀ Seller’s Signature Date/Time  AM  PM 380 ______381 Print Buyer’s/Seller’s Full Name (First, Middle, Last) Print Buyer’s/Seller’s Full Name (First, Middle, Last) 382 ______383 Street Address Street Address 384 ______385 City, State, Zip City, State, Zip 386 ______387 Telephone Number.Cell Telephone Number.Cell 388 ______389 Telephone Number.Home Telephone Number.Work Telephone Number.Home Telephone Number.Work 390 ______391 E-Mail Address E-Mail Address 392 ______393 This offer was presented to the Seller Buyer by Day/ Date/ Time AM PM MIDNIGHT NOON 394 395 396 This offer is: ␀ Accepted ␀ Rejected (without counter) ␀ Countered (See Attached Counter) by: 397 398 X______X______399 ␀ Buyer’s / ␀ Seller’s Signature Date/Time  AM  PM ␀ Buyer’s / ␀ Seller’s Signature Date/Time  AM  PM 400 ______401 Print Buyer’s/Seller’s Full Name (First, Middle, Last) Print Buyer’s/Seller’s Full Name (First, Middle, Last) 402 ______403 Street Address Street Address 404 ______405 City, State, Zip City, State, Zip 406 ______407 Telephone Number.Cell Telephone Number.Cell 408 ______409 Telephone Number.Home Telephone Number.Work Telephone Number.Home Telephone Number.Work 410 ______411 E-Mail Address E-Mail Address 412 ______This counter offer was presented to the Seller Buyer by Day/ Date/ Time AM PM MIDNIGHT NOON

ABS Rev. 01/01/17 Page 9 of 9 17 White v. Strange, 80 So.3d 1189 (2011) 2011-523 (La.App. 3 Cir. 12/21/11)

included an unchecked box indicating vendor did not authorize electronic signatures, and 80 So.3d 1189 purchaser continued to arrange for inspections Court of Appeal of Louisiana, of the home throughout the eight-day period, Third Circuit. thereby evincing no intent to terminate the Julie C. WHITE, et vir. agreement. v. Lucas STRANGE, et ux. [2] Damages No. 11–523. | Dec. 21, 2011. Deposit to be forfeited on breach Damages Synopsis Operation and Effect of Stipulations Background: Vendor brought action against prospective purchaser, seeking stipulated damages under purchase Vendor was entitled to stipulated damages in agreement after purchaser allegedly failed to timely the amount of ten percent of the purchase terminate the agreement to purchase a home. The Pineville price of home, $22,320, plus forfeiture of City Court, Parish of Rapides, Docket No. 90,143, F. Rae the deposit of $4,000, pursuant to stipulated Swent, Judge Ad Hoc, entered judgment in favor of vendor, damages provision of purchase agreement, awarding her stipulated damages, the forfeited deposit, and which was triggered by purchaser's failure to attorney fees. Purchaser appealed. timely terminate the agreement in writing before expiration of eight-day inspection period. LSA– C.C. art. 2005.

Holdings: The Court of Appeal, Cooks, J., held that:

[3] Damages [1] purchaser's e-mail did not constitute a “writing” sufficient Operation and Effect of Stipulations to legally terminate the purchase agreement; A stipulated damages clause fixes the amount [2] vendor was entitled to stipulated damages under the of damages that may be recovered for breach of agreement; and contract. LSA–C.C. art. 2005.

[3] trial court acted within its discretion in awarding vendor attorney fees. [4] Costs Vendor and purchaser; sales Trial court acted within its discretion in Affirmed. awarding vendor attorney fees in the amount of $7,500, in action brought by vendor to enforce home purchase agreement after prospective West Headnotes (4) purchaser failed to terminate the agreement prior to expiration of eight-day inspection period; agreement provided for attorney fees in the case [1] Vendor and Purchaser of non-performance, and trial court provided Acts constituting rescission facts and figures for setting the amount it did. Prospective purchaser's e-mail to vendor did not constitute a “writing” sufficient to legally terminate the home purchase agreement in a timely manner; agreement afforded purchaser an eight-day inspection period during which purchaser could terminate the agreement in signed writing, the home's listing agreement

the buyer then has a seventy-two hour period to (1) accept Attorneys and Law Firms the seller's response; (2) accept the current condition of the property; or (3) elect to terminate the agreement. The buy and *1189 Susan Ford Fiser, Alexandria, LA, for Plaintiffs/ sell agreement also provides that the buyer's failure to make Appellees, Julie C. and James White. an inspection or failure to respond in writing **2 within the Robert G. Nida, Gold, Weems, Bruser, Sues & Rundell, eight-day period shall be deemed an acceptance of the current Alexandria, LA, for Defendants/Appellants, Lucas and Sheri condition of the property. Strange. The inspection period for the property in question was Richard E. Lee, Pineville, LA, for Defendant/Appellee, Cindy December 5, 2008 through December 12, 2008. An inspection English. of the property was performed by Daniel Tarver on December 6, 2008. The report contained the following pertinent *1190 Court composed of SYLVIA R. COOKS, JAMES T. comments: “The retaining wall is leaning. I also noted wood GENOVESE, and PHYLLIS M. KEATY, Judges. rot on several of the landscape timbers.” Opinion After reading the inspection report, Mr. Strange, who had COOKS, Judge. a mechanical engineering degree, was concerned over the problems with the retaining wall. He believed repairs of the **1 This appeal involves a suit on a contract to buy and sell wall would be costly, and questioned whether he wanted to real estate. The prospective buyers in this case attempted to incur such an expense. The Stranges' real estate agent, Angie terminate the contract to buy the property. Finding the parties Sikes, informed Cindy English, the White's real estate agent, entered into a valid and binding agreement to buy and sell of the Stranges' concerns and the possibility they might seek property and the seller did not receive a timely written notice to terminate the buy and sell agreement. to cancel the sale from the buyer, the trial court rendered judgment in favor of the sellers. This appeal followed. Ms. English then requested a second inspection report on the retaining wall. Mr. Tarver inspected the property a second time and reported that the retaining wall was intact and there FACTS AND PROCEDURAL HISTORY was no erosion. He noted maintenance and eye appeal could be improved for approximately $5,000.00 to $6,000.00. The plaintiffs-prospective sellers are Julie and James White and the defendants-prospective buyers are Lucas and Sheri Following this report, on December 9, 2008, the Stranges Strange. The home and accompanying property located in sent to Sikes an e-mail asserting they wished to terminate Pineville, Louisiana, is titled in the name of Julie Converse the contract and declare the contract null and void. They Baker, who purchased the property before her marriage to stated the “decision was made due to the uncertainty of the James White. The Stranges both signed the buy and sell structural *1191 soundness of the retainer wall and the agreement on December 3, 2008. Julie Converse Baker White potential damage that could be caused.” Sikes then forwarded signed the buy and sell agreement on December 4, 2008. this e-mail to Brad Youngblood, a loan officer who was working with the Stranges, who acknowledged receipt of the The buy and sell agreement contained certain standard e-mail. Ms. Sikes also asserted she forwarded a copy of the e- provisions for the buyer's right of inspection. The buyer had mail to English, but English denied ever receiving the e-mail. an eight-day inspection period, beginning on the day after There was a previous incident acknowledged by both Sikes the buy and sell agreement was signed. If the buyer was not and English, involving an e-mail that was sent by Sikes that satisfied with the condition of the property, the buyer had English could not open. A copy of the e-mail was then faxed the following options: (1) elect, in writing, to terminate the to English. agreement and declare it null and void, or (2) indicate in writing the deficiencies and desired remedies from the seller. **3 Sikes and English testified they had a conversation on The seller then has seventy-two hours in which to respond in December 9, 2008. In that conversation, Sikes maintained she writing to indicate any willingness to remedy the deficiencies. had gotten confirmation from English that she had received If the seller declines to remedy some or all of the problems, the e-mail. Sikes believed she had made a written notation of

© 2013 Thomson Reuters. No claim to original U.S. Government Works. 19 2 White v. Strange, 80 So.3d 1189 (2011) 2011-523 (La.App. 3 Cir. 12/21/11) that fact, but her notes did not bear that out. English stated she the buy and sell agreement, the trial court's erred in awarding was with Tarver at the second inspection when she was called damages to the Whites. by Sikes. According to English, she was told by Sikes that the Stranges were considering terminating the contract, and English would get something from her as soon as possible. ANALYSIS

The record confirms on December 14, 2008, Sikes e-mailed I. Was the Buy and Sell Agreement Validly Terminated? a request to English to forward her a copy of the December [1] As they did below, the Stranges argue the Louisiana 9, 2008 inspection report on the retaining wall. That report Uniform Electronic *1192 Transactions Act, La.R.S. was faxed by English to Sikes that day. On December 15, 9:2601–2620, is applicable and allows for the use of an e-mail 2008, the Stranges sent to English a “Buyers Response to to validly terminate the buy and sell agreement in this case. Inspection” (which was a standard form), indicating there was Under the facts of this case, we do not agree. a deficiency in the retaining wall. Julie White immediately responded that they would repair or remedy the complaint. Louisiana Revised Statutes 9:2605 B(1) provides the Act Despite this offer to remedy the complaint, the Stranges did applies “only to transactions between parties, each of which not proceed with the closing. has agreed to conduct transactions by electronic means.” Under La.R.S. 9:2605 B(2), no formal agreement is needed, On December 29, 2008, the Stranges sent an “Agreement but “the context and surrounding circumstances, including the to Terminate and/or Release of Deposit” to the Whites. The conduct of the parties, shall determine whether the parties Whites refused to return the deposit. The $4,000.00 deposit have agreed to conduct a transaction by electronic means.” remained with Perego Realty. In finding there was no formal agreement nor any conduct of the parties indicating an agreement to use electronic The Whites filed suit against the Stranges for damages transmissions, the trial court reasoned: suffered, alleging they defaulted on an agreement to purchase the property. The Stranges filed a third party demand against This court has no difficulty in finding that the parties have Perego Realty and Cindy English as the authorized agents for agreed in this case to the use of a facsimile machine. Under the Whites. the Buy–Sell Agreement, the parties are permitted to send documents by fax, **5 but original signatures “shall” The matter went to trial. The Stranges argued their December be submitted to the listing agent. Then, the parties may 9, 2008 e-mail to Sikes constituted a “writing” sufficient to use other electronic means for any supplement addendum legally terminate the buy and sell agreement. At the close of or modification to the Acceptance. No reference to the trial, the trial judge took the matter under advisement. Shortly Uniform Act is required for anything having to do with thereafter and before rendering a decision, the trial judge the Acceptance. There was no supplement, addendum passed away, and the matter was transferred to another judge. or modification, although the testimony showed that the After reviewing the record, that judge **4 then rendered buyers made multiple verbal requests, such as beginning a written reasons finding the parties entered into a valid and wall and early occupancy. binding agreement to buy and sell the property, and there was no timely writing to cancel the sale. Further, the trial Even if this clause was sufficient to invoke the “Act,” these judge noted there was no refusal by the sellers to repair the parties had no regular use of any electronic transmission, deficiencies listed in the inspection report. Judgment was other than fax. While Sikes and her client may have used rendered in favor of the Whites, and awarding damages in the email, there is only one reference in the testimony to Sikes amount of $22,320.00, a forfeit of the $4,000.00 deposit and and English using email before the 9th and that was not $7,500.00 in attorney fees. a successful use. The court believes that Sikes believed that English told her she got the email; however, Sikes, The Stranges contend on appeal that the termination of the knowing the email was sent, believed there was more to buy and sell agreement was valid and that the court erred in her conversation with English than was actually said. It is ruling in favor of the Whites. In the alternative, the Stranges not uncommon for two parties to have a conversation about argue even if it were found they did not validly terminate an event and not understand one had more information than the other. The notes that Sikes made only referenced

whether or not the Whites “knew” something and did not Further, the record indicates, as late as December 14, 2008, contain any reference to the email. Sikes was still requesting inspection reports and appraisals from English, which gave English no reason to believe the The conduct of the parties did not give any indication that Stranges were not still negotiating details of the purchase of the Whites or English did or would agree to the use of a the house. Sikes herself testified that on December 15, 2008, forwarded email as the means of canceling the Agreement the Stranges were still asking for reports and for things to to Buy and Sell. The Court also believes that English did be repaired and changed at the house. English testified on not get the email. Her testimony is somewhat corroborated December 14, 2008, she called Sikes to inform her that Kevin by the exchange between Youngblood and Daniels on the Bell, the foundation repair person, was meeting her at the 12th, to the effect that English did not know until 12th that house, and she would forward his report to Sikes as soon the closing was not going to take place on the 15th. Even as she received it. According to English, Sikes responded when she learned the closing would not take place, she still “okay,” further leading English to believe the agreement to did not know the sale would never take place, especially buy and sell had not been terminated. The record clearly since she received a request for the Tarver report on the establishes the conduct of the Stranges and Sikes does not 14th and the Buyer's Response on the 15th. According reflect that of parties who believed the buy and sell agreement to her testimony, English did not receive any termination had been terminated. notice in writing and, so, she simply believed that Sikes told her the Stranges wanted to terminate as a negotiation tactic. The court does not find this conclusion to be unreasonable. II. Damages. [2] Finding the parties entered into a valid and binding buy The court also questions whether cancelling a buy-sell and sell agreement, and under Option 1 of the agreement agreement is a situation where it would be appropriate there was no timely writing to cancel the sale and, under to apply the “Act.” This is a real estate transaction Option 2, the sellers did not refuse to repair the deficiencies and there was testimony from all concerned that realtors listed on the Buyers Response to Property Inspection Report, are required to use certain contract forms, including the the trial judge found the sellers were entitled to damages. Property Inspection Response forms. In fact, Sikes testified The trial judge noted the Agreement provided for stipulated that her Broker instructed her to complete and send damages in the amount of ten percent (10%) of the purchase the inspection report on *1193 the 15th. Thus, while price **7 $22,320.00), forfeiture of the deposit ($4,000.00), electronic transmissions other than a fax may be convenient and attorney fees ($7,500.00). Thus, the only amount which for those negotiating the details of everyday business, it was subject to any discretion was the trial judge's award would appear that the Louisiana Real Estate Commission of attorney fees. The trial judge did not accept the Whites' believes that certain significant actions should be in a arguments below that the Stranges were in bad faith and they certain form. In fact, on 12/29, Sikes used a pre-printed should be liable for actual damages. form to attempt termination and return of the deposit. This document appear to be the type of form that could be used The Stranges' assignment of error, asserting the trial judge for termination, but, in this **6 case, the document came should have ordered Perego Realty to refund the $4,000.00 too late. There was no “writing” sufficient to cancel the deposit to them, was premised on its belief that the buy and contract on or by the 12th of December. sell agreement was properly terminated. Finding no error in the trial court's ruling that the agreement was not properly We find no error in the trial judge's reasoning in support of terminated, this assignment of error has no merit. her finding that the Stranges failed to timely terminate the buy and sell agreement. [3] As to the award of damages in the amount of $22,320.00, we find the trial court correctly applied the stipulated amount We also note in the Listing Agreement, completed by English of damages listed in the buy and sell agreement. The law is and signed by Julie White, the box that states “Seller established that parties to a contract may stipulate damages authorized the authentication of his signature or of the to be recovered in case of non-performance. See La.Civ.Code Purchaser's by facsimile (fax) or e-mail” was left unchecked. art. 2005. A stipulated damage clause fixes the amount This contradicts the Stranges' contention that e-mail was of damages that may be recovered *1194 for breach of authorized by the parties in this case. contract. Nesbitt v. Dunn, 28,240 (La.App. 2 Cir. 4/3/96), 672 So.2d 226.

For the foregoing reasons, the judgment of the trial court is [4] We also find no abuse of discretion in the trial court's affirmed. Costs of this appeal are assessed against appellants, award of $7,500.00 in attorney fees. The buy and sell Lucas and Sheri Strange. agreement provided for attorney fees in the case of non- performance, and the trial court provided facts and figures for AFFIRMED. setting the amount it did. Parallel Citations

2011-523 (La.App. 3 Cir. 12/21/11) DECREE