How can you manage conflicting clauses in real estate contracts?

1 What are conflicting clauses?

Conflicting clauses are provisions in a real estate contract that contradict, modify, or override each other and can arise from drafting errors or inconsistencies, multiple amendments or addenda, conflicting terms from different documents, ambiguous or vague language, or lack of standardization or uniformity. These conflicting clauses can lead to uncertainty about the rights and obligations of each party, disagreement about the interpretation or enforcement of the contract, breach of contract claims or defenses, delay or disruption of the transaction or performance, and loss of trust or goodwill - all of which can cause problems for both parties.

2 How to avoid conflicting clauses?

To avoid conflicting clauses, it is important to take preventative measures during the contract drafting, reviewing, and negotiating process. Utilize clear and precise language that reflects the intent and expectations of both parties, as well as standard forms and templates that are consistent and compatible with each other. Additionally, review the entire contract for any errors, inconsistencies, or gaps. Compare and reconcile any conflicting terms from different documents, such as leases, purchase agreements, and financing agreements. Ensure that any amendments or addenda are properly incorporated and referenced in the main contract. If you are unsure about any clauses or terms, seek legal advice or guidance.

3 How to identify conflicting clauses?

When a dispute arises or a situation changes, conflicting clauses may not be obvious or apparent. To avoid this, you need to be vigilant and proactive in identifying and addressing any potential conflicts. Thoroughly reading the contract and paying attention to the details and nuances is one way to find conflicting clauses. Additionally, look for any clauses that are inconsistent, contradictory, or ambiguous. Furthermore, check for clauses that modify, limit, or exclude other clauses. Lastly, using a checklist or a software tool to scan and flag any conflicting clauses, as well as asking questions or seeking clarification from the other party or a third party if you are unsure about any clauses or terms can help identify any potential conflicts.

4 How to resolve conflicting clauses?

If you encounter a conflicting clause in a real estate contract, it is important to resolve it quickly to avoid further complications or disputes. You could negotiate with the other party to come to a mutual agreement on the interpretation or application of the conflicting clause. Alternatively, you could modify or amend the contract to remove or harmonize the conflicting clause. You could also invoke a dispute resolution mechanism, such as mediation, arbitration, or litigation, to settle the conflict. Additionally, you could waive or release the conflicting clause or the right to enforce it. In extreme cases, you may have to terminate or cancel the contract if the conflict is material or irreconcilable.

5 How to prevent future conflicts?

To prevent future conflicts, it is important to learn from your experience and take measures. Document and communicate any resolutions or agreements regarding the conflicting clause, review and update your contract templates and forms, implement quality control and compliance procedures to ensure accuracy and completeness, train and educate staff and stakeholders on how to draft, review, and negotiate contracts, and build good relationships with clients and partners based on trust and cooperation. By doing these things, you can help avoid any errors or inconsistencies in the future.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?