Chapter 17 - § 17.1 • INTRODUCTORY

• Jurisdiction: Colorado

§ 17.1 • INTRODUCTORY

§ 17.1.1—Types of Land Contracts

A form of contract used in Colorado in the nineteenth and early twentieth centuries was the bond for deed, or bond for title. The bond would evidence an obligation on the part of the obligor to pay to the obligee a sum certain, the obligation to be void upon the obligor's conveyance of the property to the obligee, the conveyance in turn being conditioned upon the obligee's performance of the terms of the bond, typically including the payment of the purchase price.¹ The bond for deed lives on in a few vestigial references in the Colorado statutes.²

A form of contract formerly in vogue in Colorado was the "Receipt and Option Contract." In DeFeyter v. Riley,³ the Colorado Court of Appeals held that the Receipt and Option Contract was a true contract, not merely an option, saying:

The fact that the word "option" appears in the title of an instrument does not mandate a determination that the instrument is an option contract. . . . The import of that word is negated by other words used in the document, including "Purchaser," "seller," "earnest money part payment," and "purchaser agrees to buy." Such terms are indications of the parties' mutual obligation to sell and purchase.

Nevertheless, as late as 2003 the Colorado Court of Appeals stated that, "In receipt and option contracts, in exchange for payment of a certain sum of money, the buyer receives an option to purchase the property at a set time for a set amount."⁴

In 1981, the Receipt and Option Contract forms were replaced with Contract to Buy and Sell Real Estate forms with the vendor's remedy being limited to liquidated damages. In addition, other forms also provided for remedies to include specific performance.

The forms of contract in current use in Colorado are the contract to buy and sell real estate⁵ and the installment land contract.⁶

§ 17.1.2—Land Contracts Distinguished from Other Agreements

An exchange carries with it no implication of reduction to money as a common denominator. Where the purchase price of both properties is negotiated and agreed upon at a stated figure, and the purchase price is paid by assumption of notes, cash, purchaser to vendor promissory notes, and equities in land at a prenegotiated fixed price, the bargain is made, the value is measured in terms of money, and the transaction is a sale.⁷ An exchange is not a "sale" for the purpose of determining a broker's commission.⁸

A mere offer to sell, unaccepted by the other...