Contracts
A Tennessee real estate contract has a 'dispute resolution' clause requiring mediation before litigation. This clause is:
AVoid since courts cannot be denied jurisdiction
BEnforceable — requiring parties to attempt mediation before filing a lawsuit✓ Correct
COnly enforceable in commercial transactions
DNot applicable to real estate contracts under Tennessee law
Explanation
Mandatory mediation clauses in Tennessee real estate contracts are generally enforceable. Courts support alternative dispute resolution, and mediation clauses are commonly included in purchase contracts and buyer/listing agreements.
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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