Remedies-2017 AAR PC

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Section 7.a Lines 310-314


The basic intention of Section 7a. is to provide a party an opportunity to cure a potential breach of the contract.

If a party fails or is reasonably anticipated to fail to comply with any provision of the purchase contract the other party shall deliver to the non-complying party a notice detailing the non-compliance.

If the noncompliance is not cured within three (3) days the non-compliance becomes a breach of contract.

If Escrow Company or recorder’s office is closed on the last day of the Cure Period, and COE must occur to cure a potential breach, COE shall occur on the next day that both are open for business.

What are the risks associated with the remedies section of the purchase agreement?

  1. Disputes due to the improper use of the cure notice
  2. Unauthorized practice of law

Why is it necessary to have a cure period?

  • Helps reduce liability for the real estate agent
  • Provides guidance on dealing with all contract failures in a uniform matter
  • Helps eliminate whether or not a breach has been waived
  • Bolsters “time is of the time-consuming
  • Provides some inherent “fairness” to all parties
Quick Quiz

Fill in the Blank:

If the is not cured within three (3) days the noncompliance becomes a breach of.

Does the cure period apply to an unfulfilled loan contingency?

The cure period never applies to contingencies only to the failure to perform a contractual duty.

Can there be a breach without a cure period notice?

No, there are no automatic breaches in the AAR Residential Purchase Agreement.

Section 7.b Lines 315-324


  • In the event of a breach, the non-breaching party may cancel the contract
  • Non-breaching party may proceed against the breaching party for any claim or remedy that the non-breaching party may have in law or equity (subject to ADR)
  • In the event of a buyer breaches, the seller may accept the earnest money as seller’s sole right to damages
  • Unfulfilled loan contingency is not a breach of contract
  • Parties agree that the failure of any party to comply with the terms and conditions of section 1.d to allow COE to occur on the COE date, if not cured after a cure notice is delivered will constitute a material breach and render the contract subject to cancellation.
Quick Quiz

Fill in the Blank:

In the event of a breach the non-breaching party may cancel the.

Section 7.c Lines 325-333


The buyer and seller agree to mediate any contractual disputes

Mediation costs are paid equally by the parties

Disputes which are unresolved by mediation will be submitted to arbitration unless one or both parties opts out (with notice to the other party) within 30 days after conclusion of the mediation conference

If either party opts out of arbitration, either party may resort to court action

What is the difference between mediation and arbitration?

Arbitration is similar to litigation in that it is an adversarial process whereby the parties submit evidence to a neutral third person (the arbitrator) who then renders a decision regarding the dispute. However, arbitration is usually private and not conducted in the surroundings, or under the formal rules and procedures, of courts. In order to compel another party to arbitrate a dispute, in most cases, the parties must have previously entered into an agreement to arbitrate their disputes.

Litigation is an adversarial process whereby the parties submit evidence to a judge or jury and then rely on the judge or jury to make and impose a binding decision regarding the dispute. Litigation is governed by formal rules and procedures of court and generally is time consuming and expensive. Since it is adversarial, litigation is in effect a contest in which a winner and loser are selected.

Mediation is different from litigation and arbitration in many respects. Perhaps the most significant difference is that mediation is a non-adversarial process. That is, the parties do not argue their positions and give decision-making power to a third party. Instead, the mediator’s role is to assist the parties in achieving a mutually agreeable resolution of their dispute.

Mediation and arbitration are both methods to resolve disputes out of court.  However, the similarities end there.  In arbitration, the proceeding is governed by an arbitrator who hears testimony and otherwise reviews evidence, like a trial.  The arbitrator then makes a decision as to which party prevails.

Quick Quiz

Fill in the Blank:
is an adversarial process whereby the parties submit evidence to a judge or jury and then rely on the judge or jury to make anda binding decision regarding the dispute.

By contrast, in mediation, a mediator oversees the process, but he/she does not take evidence or make a ruling.  Instead, a mediator, using conflict resolution skills, helps parties reach their own agreements.  The resulting agreements are binding if the parties want them to be.   While mediation may seem, by its description, to be a haphazard process, in fact, it is highly successful.  The American Arbitration Association has found that mediation results in a settlement over 85 percent of the time.  Skilled mediators help people determine their true interests and then make realistic offers.  In addition, because the process involves communication and does not render one party a “winner” and one party a “loser,” mediation often allows parties in conflict to salvage their relationships.  Mediation is also a more relaxed process and, consequently, less stressful.   One may mediate at any point; one need not collect evidence or retain attorneys prior to initiating mediation.

Some people combine the process in what is called “Med-Arb.”  That means the parties start mediating a dispute and then switch to arbitration (using the mediator as an arbitrator) if they are unable to reach an agreement.

Before deciding what process is best for you, it is wise to talk to a mediator, an arbitrator and/or an attorney.

Section 7.d Lines 334-340


The following are excluded from ADR

  • Any action brought in small claims court ($2500.00)
  • Foreclosure
  • Unlawful entry or detainer action
  • Any matter subject to the probate courts

Section 7.e Lines 341-343


  • The prevailing party in any dispute is entitled to an award of their reasonable attorney fees and costs
Quick Quiz

Fill in the Blank:

The prevailing in any dispute is entitled to an award of their reasonable attorney fees and .





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