Can you cancel a contract is money hasn’t exchanged hands?
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Can you cancel a contract is money hasn’t exchanged hands?
Hi – I signed a contract to buy a calf that will be born in 2017. The contract was
signed and I was to mail the check to her. Before the check got to her I decided
to not move forward. I reached out to her and told her I would not like the calf
anymore and since she didn’t have the money yet I thought the contract wasn’t
valid yet and asked her to shred the check when it arrived. Needless to say she
got the check 2 days later and cashed it. She said because I had already signed
the contract I couldn’t have the money back. So my question is, would the
contact be valid if she didn’t have the money yet? Thanks – cc
Asked on July 7, 2016 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
A contract is valid and enforceable from the moment it is signed or executed; there is no requirement that money (or anything else of value) actually have changed hands to make it enforceable, and no right to cancel prior to paying (unless the contract itself says you can do that). All that us required is mutual agreement (shown by you both signed or otherwise agreeing to the contract) and EITHER an exchange of things of value or an exchange of promises to provide things of value--like a promise to provide a capf in exchange for money.
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