Acceptance: The Exact Timing

The History of the British Pub

Certainly, everyone wants to know that their Offer has been accepted, otherwise, there’s no contract.

Signed, Sealed and DELIVERED

It’s the delivered part which is the actual acceptance.

So, when did that happen? Exactly!

In Person

  • This would be the time when the  physical document left the hands of the Offeree and was returned to the Offeror

By Mail

  • This would be the time when Canada Post placed the envelope in the mailbox, or had a person sign for receipt of a registered letter

By Fax

  • This would be the time when the two fax machines connected through the telephone system and a confirmation time is published

By E-Mail

  • This would be the time when the e-mail message reaches the network of the Offeror’s internet provider

By Online Order

  • This would be the time when the order is placed by the Purchaser

That’s what happens with contracts generally. We have to have the “go ahead”, the “authorization to proceed”. This is the “acceptance”. From time to time, the exact timing is of critical importance, where, for example a Supplier lowered the price for Monday only. The person placing the order would want to ensure that the order was placed by 23:59:59 hours, since one more second would bring us to Tuesday and a higher price.

Real Estate Deals: Importance of Timing

For real estate transactions, acceptance often starts the clock running for:

  • Delivery of a deposit – within 24 hours
  • Escape Clause – 48 hours
  • Inspection – 3 days
  • Financing – 5 days
  • Status Certificate – 10 days
  • Sale of Property – 30 days

There is a provision that sets out that “time is of the essence”. So, we need to know precisely when the contract began in order to calculate the times various matters are due. Sometimes, the default position is that the contract becomes null and void, while other times one party is in breach.

Agreements for Real Estate

Agreements for the purchase of real estate have been required to be in writing since the 17th Century. The first Statute of Frauds was enacted in 1677.

There was a very good reason for this. One person might say they bought a property for “X” dollars and the other party might say that it was “Y” dollars or not at all. These arrangements often took place in discussions at the only local meeting place which was the tavern. That was obviously a complicating factor as well.

In order to ensure that the sale was indeed proper, Courts began to require evidence in writing when it came to selling the farm. Livestock could still be handled verbally, but when it came to something as serious as the farm, it had to be in writing. Subsequently, Parliament passed the Statute of Frauds which confirmed this procedure.

The next issue is “how many copies”. Most people were illiterate, they could not read or write. This was a special skill for the educated. This meant that someone who was literate would have to write up the agreement. This was someone who was very good with calligraphy and the document was often pages and pages in length. They were paid by the word, so, they would never use one word when they could use three.

There were no carbon copies or photocopies in the 17th Century. This usually meant one single document signed by both parties. They were usually present at the same time. Assuming just one copy, that document would be held by the Vendor who would use it as checklist and it would be given to a Notary to prepare the actual Deed of conveyance. This document could be 50 to 60 pages and take months to produce.

In the tavern, we are working with one document. It may go back and forth between the parties, and then the last step would be “acceptance” by the Offeree. The signature would be placed on the document or the final initial, and we would have a deal in place. The Offeree would say that they were in agreement. This would be done verbally, however, you can appreciate that on many occasions it would be the signature and the handing over of the physical document. Most of the time we are talking about one single physical document and that document went with the Vendor or the Notary. This one single document was evidence of the contract in writing to comply with the Statute of Frauds.

The important aspect here is the second step in the acceptance process, that is, telling the Offeror that the Offer has been accepted. That may take place verbally or it may take place by handing the document over, that’s delivery. One way or the other, the Offeror has to be made aware that the Offeree is in agreement and that we now have a contract in place.

Evidence of the Time of Commencement in Modern Practice

Most of the time, no one records the specific or exact time for the commencement of a real estate contract. If evidence was ever required, then, an individual who knew of the timing would be called to testify as to this fact.

In most jurisdictions, there is no place for a specific time, the date itself is often as close as it gets. This was also the case in Ontario from the 17th Century until the 21st Century, so there is indeed a long history here about being vague about this.

OREA included a statement in its standard Agreements known as a Confirmation of Execution. This was a time inserted by the last person to sign. This was the time of signing and would precede actual acceptance which probably was soon to take place.  That was interesting, but there was no legal significance associated with this fact.

In 2008, this statement was changed to the Confirmation of Acceptance. The problem here was that most practitioners were not instructed with respect to its completion. That meant that the real estate industry simply carried on, and treated this, as if it were the Confirmation of Execution.

This type of document is not commonplace in other jurisdictions.

Confirmation of Acceptance

CONFIRMATION OF ACCEPTANCE: Notwithstanding anything contained herein to the contrary, I confirm this Agreement with all changes both typed and written was finally accepted by all parties at ……………………… this …………….. day of………………………………………………………….., 20……….. (a.m./p.m.)

……………………………………………………………………………………..

(Signature of Seller or Buyer)

How many people should sign?

Just one person, it says “I”. This statement is not necessary to create an agreement. It’s simply evidence.

Should it be signed by one of the Parties?

That’s what it says, so the answer would be “yes”.

When should the COA be signed?

After actual acceptance!

It says “I confirm this Agreement with all changes both typed and written was finally accepted by all parties”. That’s past tense. The acceptance has already taken place. It’s not about to happen in the future, like the COE. So, steps 1 and 2 of the acceptance process have already taken place, that’s :

1) the signing, and

2) the delivery (communication of acceptance).

What should a person know before they sign the COA?

They should know “for sure” that it was accepted. That means step 2 in the process already took place. Often that’s the missing link.

Should the Offeree sign?

Yes, if they know that the communication has taken place. If not, then they should not sign it. All too frequently, there is only an intention to take the next step and communicate with the Offeror. If that’s the case, then “no”, they can’t sign.

Should the Offeror sign?

Quite possibly, this would be the best person. At this point, they have the communication of acceptance. They know that the other side is telling them that they have a deal. Acceptance now, is past tense. So, the Offeror should be able to go ahead and sign.

The COA can be signed at the very same time that the Offeror is signing the Acknowledgement.

Should the Agent sign?

Actually, there is nothing wrong with this at all. The Agent is likely the person who was charged with the responsibility to tell the Offeror that their Offer was accepted. So, if anyone knows that time, it would be the Agent.

This is not a contractual document. This is an evidentiary document about the contract. When did it start? It started when:1) I phoned the Offeror’s Agent, 2) when I texted, 3) when I faxed, 4) when I mailed, 5) when I emailed, (subject to the rules of delivery mentioned above).

Real Estate Agent’s Negligence

This arises when the real estate agents involved in the negotiations don’t know when the contract began. It’s their obligation to know this time precisely.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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