Legal Question in Real Estate Law in California

Re: Indemnification Clause for Escrow Cancellation

We're here to answer simple questions, but what you need is what we get paid to do. If you don't find a form you can purchase; we'll be happy to draft a proper clause/contract for you. Our CA attorney is a real estate broker.

Re: Indemnification Clause for Escrow Cancellation

Cancellation of the escrow and return of funds deposited into escrow does not itself terminate the underlying purchase agreement or exonerate the parties from liability under the escrow instructions or purchase agreement unless such cancellation is specifically stated in writing by the parties. (Civ. Code sec. 1057.3 subd. (e).)

You do not need an indemnification clause, as you are mixing up two different areas of law. What you need is for your cancellation papers to say more than the fact that you are cancelling the escrow, they must make clear that you are cancelling the entire underlying purchase and sale agreement. (Cohen v. Shearer (1980) 108 Cal.App. 3d 939, 942.)

Please be advised that Mr. Nance, who posted previously, is not licensed to practice law in the State of California. The practice of law in California by a person who is not licensed by the California State Bar is guilty of a misdemeanor for the unauthorized practice of law.

Be careful who gives you advice in this matter.

Very truly yours,

Re: Indemnification Clause for Escrow Cancellation

In re-reading Mr. Nance's post, it would appear that in addition to the unauthorized practice of law, he is soliciting (which is an ethical violation), and is also capping.

Capping is also a misdemeanor in California.

Very truly yours,

Re: Indemnification Clause for Escrow Cancellation

It strikes me as odd that an attorney from Louisiana, which has the only legal system in the U.S. that is based largely upon Civil (Roman) Law rather than the Common Law (of England) would even think of injecting himself, as he does time and again, into California legal problems.

I fully agree with Mr. Roach's answer. What you seem to need is a release. Indemnification agreements are usually used to protect someone from possible third-party claims. If you are the seller and you are letting the buyer off the hook, you can probably expect to demand and get a release of all claims written into your "cancellation papers" (probably more technically described as a mutual rescission agreement), but he may want the releases to be mutual!