What happens to contracts when one of the parties passes away before completion? Simply speaking, it depends on what the contract is for and what it says. Practically however, the implications are not straight forward.
Our starting point involves firstly asking whether there is a contract in place. If an offer to enter into a contract has been made and one of the parties dies, the offer usually lapses if the offer has not, or can’t be accepted.
If there is a valid contract, and the subject matter concerns personal rights (like employment contracts for example) these contracts will naturally come to an end.
The final scenario relates those contracts that involve the transfer of proprietary rights – like contracts for the sale of land. These contracts will remain on foot – meaning they are enforceable by or against the estate.
There is often an expectation that personal representatives will be able to immediately perform these obligations when they arise. In practice however, there is often a disconnect between:
- the time to do what is needed to give personal representatives authority to act; and
- critical dates for performance under the contract, which may lapse before that authority is granted.
This potentially exposes deceased estates to a breach scenario.
Breach of contract situations can be serious, messy and stressful in a time that is already very stressful for most personal representatives.
Navigating these issues requires a combination of patience, legal expertise and good negotiation skills.
If you would like more information or to discuss this particular scenario, please contact us on 07 5443 9988 or [email protected]
Argon Law is a trusted Sunshine Coast law firm based in Maroochydore. We are respected commercial and property lawyers and are eager to assist you in any way we can.
Always ensure you seek professional advice for your specific circumstances. The above is not advice and is intended to be general in nature only.