Dictionary of Business Terms: dual contract
dual contract
illegal or unethical practice of providing two different contracts for the same transaction. The one for the larger amount is used to apply for a loan, while the real contract is for a lower amount.
Dictionary of Real Estate Terms: dual contract
dual contract
the illegal or unethical practice of providing 2 different contract for the same transaction.
Example: Abel wants to purchase a home from a builder for $144,000 but has no cash for the down payment. The builder suggests that they prepare a fictitious contract for $160,000 and try to borrow 90% of $160,000. The bank's attorney discusses the dual contract and explains that they could be guilty of attempted fraud.
