Can we move forward with the new buyer before the termination paperwork with the prior buyer is fully executed? – North Carolina

Short Answer

Under North Carolina law, a seller under a signed purchase contract generally must treat that contract as binding until it is properly terminated in the manner the contract allows. Moving forward with a new buyer before the first contract is fully and formally terminated can expose the seller to claims for breach of contract or specific performance. A new contract is usually safest only after all parties to the prior contract have signed a written termination and any related issues, like deposits, are resolved or clearly addressed in writing.

Understanding the Problem

The narrow question is whether, in North Carolina residential real estate, a seller can go under contract with a new buyer while the termination paperwork with the prior buyer is still not fully signed by everyone. The concern falls under real estate contract law: when does the first contract actually end, and when is the seller free to accept a new offer without creating conflicting obligations? For example, a seller may have accepted a termination verbally or by email, but the formal termination agreement and refund of deposits are still pending. The issue is whether a seller can confidently proceed with a new buyer at that stage, or whether doing so risks breach, disputes over deposits, or demands to close from the first buyer.

Apply the Law

North Carolina treats a signed offer to purchase and contract as a binding agreement once all parties sign. That agreement continues until it ends according to its own terms (such as an unextended due diligence period passing without the buyer proceeding) or the parties sign a written termination or release. The main forum for resolving disputes about competing buyers or alleged breaches is the state courts, typically the Superior Court or District Court in the county where the property sits, depending on the dispute amount and requested remedies. Deadlines often come from the contract itself, such as due diligence deadlines and settlement dates, not from a general statute.

Key Requirements

Existing contract is still in force: Once all parties sign a North Carolina residential contract, the seller remains bound until the contract terminates under a contract contingency, expires by its own terms, or is ended by a signed termination or release.
Clear basis for termination: There must be a clear contractual or agreed basis that ends the first buyer’s rights (for example, written agreement to terminate, buyer’s proper exercise of a termination right, or clear failure of a contingency).
No conflicting obligations: The seller should avoid creating overlapping promises to sell the same property to two different buyers for the same time period, which can lead to breach of contract or specific performance claims.

What the Statutes Say

N.C. Gen. Stat. § 39-39 (Risk of loss in real estate contracts) – Confirms that a contract to buy and sell real estate carries ongoing rights and duties until title or possession changes or the contract otherwise ends.
N.C. Gen. Stat. § 47E-5 (Residential disclosure timing and cancellation rights) – Gives certain buyers limited cancellation rights tied to statutory disclosures, which can be one way a contract ends.

Analysis

Apply the Rule to the Facts: With no specific facts given, consider two narrow variations. In one scenario, the first buyer and seller have agreed by email to terminate, but no one has signed the formal termination form yet; under North Carolina practice, the safest course is to treat the first contract as still active until the written termination is fully signed and any deposit handling is clearly addressed. In another scenario, the first buyer failed to pay due diligence money or otherwise missed a clear contractual requirement that automatically ended the contract; even then, careful documentation that the first contract has ended helps reduce risk before signing with a new buyer.

Process & Timing

Who files: If a dispute arises, the complaining party (often the first buyer) would file a civil action. Where: Typically in the Superior Court or District Court for the North Carolina county where the property is located. What: A complaint for breach of contract, declaratory judgment, and sometimes specific performance. When: North Carolina has a multi-year statute of limitations for written contract claims, but issues about overlapping contracts usually surface quickly as closing dates approach.
Before any lawsuit, the parties and their brokers often use standardized termination and release forms to clearly end the first contract and resolve deposit issues. This usually occurs promptly once the parties agree to part ways, but the exact timing varies and can be delayed if there is a dispute over due diligence or earnest money.
Once the first contract is clearly terminated in writing and any deposit issues are addressed or set aside by agreement, the seller can proceed with a new buyer contract. If a lawsuit is filed, the court may ultimately enter a judgment explaining whether the first contract remained in force and what remedies apply.

Exceptions & Pitfalls

If the first contract automatically terminates under its own terms without needing a signed release, the seller might be free to proceed sooner, but ambiguity about whether termination actually occurred can still create risk.
Relying only on verbal agreements or informal emails to terminate, without a signed written termination, is a common mistake and can leave the seller open to competing claims.
Disputes over earnest money or due diligence fees can complicate termination if the buyer claims the contract is still alive until those issues are resolved; documenting how deposits will be handled in the termination paperwork helps avoid this trap.

Conclusion

Under North Carolina law, a seller under a signed purchase contract generally should not treat that contract as fully ended until it terminates under its terms or all parties sign a clear written termination or release. Moving forward with a new buyer before the first contract is formally ended can create conflicting obligations and potential breach claims. The safest next step is to obtain a fully executed termination (including agreement on deposit handling) before signing a new contract for the same property.

Talk to a Real Estate Attorney

If there is a question about ending one North Carolina real estate contract and moving forward with another buyer, our firm has experienced attorneys who can help explain the options and risks. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.