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We are in the process of purchasing some land, and one of the requirements of the contract is

The buyers, BUYERS_NAME, agree to negotiate a trade of land with the neighbors, NEIGHBORS_NAME, if requested by the NEIGHBORS_NAME.

My concern is with the phrase "negotiate a trade of land". Does that mean that no matter what, we will be required to have a successful negotiation, meaning it ends with land traded?

Or does it simply mean that we are required to talk to them about it if they request to talk about it?

Thank you!

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  • One buzz word to look for is an "agreement to agree".
    – ohwilleke
    Commented Apr 20, 2022 at 20:06

2 Answers 2

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Agreements to agree are unenforceable

The contract requires you to negotiate and, probably, to do so in good faith (or at least, not in bad faith). That means you must come to the table looking to do a reasonable deal.

It doesn’t, and cannot, require you to make that hypothetical deal. That would be an agreement to agree and there is a long line of legal precedent that such terms are unenforceable.

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  • A limited option to buy / sell at set conditions or better could be included and enforced though.
    – Deduplicator
    Commented Apr 21, 2022 at 14:14
  • Would the condition as stated imply that if the neighbours give the best offer then OP must accept it? I.e. is refusing the best monetary offer seen as "unreasonable" in general? OP may not want to accept the best offer because they do not have the best relationship with the neighbours... I wonder if accepting a different lower offer might be seen as "not negotiating in good faith" and would thus trigger that clause.
    – GACy20
    Commented Apr 21, 2022 at 16:29
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    @GACy20: For naming purposes, let's support a landlord has a contract with their tenant. Right of First Offer means the landlord must offer to sell the property to the tenant before selling on open market. However, after rejecting the offer the owner can still accept a worse offer. Right of First Refusal means that before accepting an offer to buy, the landlord must offer the tenant the same terms. Right of first offer doesn't force any sort of price matching, but right of first refusal means the landlord cannot sell to others if the tenant is willing to match their offer.
    – Brian
    Commented Apr 22, 2022 at 14:23
  • UDPATE: The final wording that I suggested and the seller agreed to was: – "The buyers, BUYERS_NAME, agree to discuss a trade of land with the neighbors, NEIGHBORS_NAME, if requested by the NEIGHBORS_NAME on or before ONE_YEAR_IN_FUTURE." – Thank you so much for the answers, and helping me to understand. I believe that the statement in the contract is a simple good faith addendum that was added so that the neighbors were not left hanging. It's just nice people trying to be nice to other nice people.
    – Beau West
    Commented Apr 26, 2022 at 13:46
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Just talking with them is insufficient, but you are also not committed to end up with land traded.

It is implied in contracts that parties act in good faith. This means you must negotiate honestly and fairly with the intent to reach an agreement in accordance with the spirit of the contract.

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  • Does that mean that, if the neighbors deemed you to be unreasonable, they could sue, and if the judge agreed, you could be forced to trade?
    – towr
    Commented Apr 21, 2022 at 12:24
  • @towr No, in the unlikely event that they win they probably recover expenses they had related to the negotiation process.
    – IKnowNothing
    Commented Apr 21, 2022 at 13:07

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