Utah Real Estate Contracts Guide: REPC and Beyond

# Utah Real Estate Contracts Guide: REPC and Beyond

Contract law is one of the most tested topics on the Utah PSI exam, especially the Utah-specific REPC (Real Estate Purchase Contract). You must understand both general contract law principles and the specific provisions of Utah's standard residential purchase form.

Elements of a Valid Contract

All enforceable real estate contracts in Utah require:

1. Mutual assent: A definite offer and an unambiguous acceptance. A counteroffer cancels the original offer.
2. Consideration: Something of value exchanged — the purchase price from the buyer and the promise to convey title from the seller.
3. Capacity: Both parties must be at least 18 and mentally competent.
4. Legal purpose: The contract's object must be lawful.
5. In writing: Utah's Statute of Frauds requires real estate contracts to be written and signed to be enforceable.

The Utah REPC: Key Provisions

The REPC (Real Estate Purchase Contract) is the standard Utah residential purchase form. Understanding its specific provisions is essential for the state section of the exam.

Purchase Price and Earnest Money The REPC specifies the total purchase price and the earnest money deposit amount. Earnest money must be deposited into the brokerage's trust account promptly. If the buyer defaults, the seller's remedy for liquidated damages is generally limited to the earnest money.

Financing Condition The REPC includes a financing deadline by which the buyer must obtain a firm loan commitment. If the buyer cannot secure financing by the deadline, they can void the contract and recover their earnest money.

Due Diligence Deadline Utah's REPC includes a specific due diligence period during which the buyer can inspect the property and conduct any investigations. If the buyer discovers unsatisfactory conditions, they can cancel the contract before the deadline and receive their earnest money back.

Settlement and Closing Date The REPC specifies a settlement deadline. Failure to close by this date can put the defaulting party in breach of contract.

Seller Financing Addendum When a seller carries financing rather than the buyer obtaining a third-party mortgage, a seller financing addendum is attached to the REPC. This outlines the terms of the seller-carried note and deed of trust.

Contract Status Terms

• Executory: Obligations remain — any signed contract before closing
• Executed: All obligations fulfilled — after a completed closing
• Void: Never legally valid (illegal purpose, missing element)
• Voidable: Valid but rescindable by one party (e.g., contract induced by fraud)

Breach of Contract in Utah

Buyer's default: The seller's typical remedy is retaining the earnest money as liquidated damages. The REPC must specifically provide for this. Sellers may also pursue specific performance or additional damages in some circumstances.

Seller's default: The buyer may demand return of earnest money and sue for specific performance (compelling the sale) because real property is unique.

Listing Agreements

Utah listing agreements must include a definite expiration date, the commission amount, and the property description. Open-ended listings with no expiration date are not enforceable under Utah law.