We effectively have one name for legal contracts dealing with the sale of land. The reference is to an “Agreement of Purchase and Sale”.
However, that doesn’t take into consideration that it started out simply as an Offer.
Why not describe the document as an “Offer”, and then once it’s accepted we have an “Agreement”.
In casual language, that’s still the case because OREA makes reference to the “offer” several time in its Form 100 Agreement.
OREA also makes reference to the Offer, when we in fact have a conditional Agreement. Here’s the standard Inspection clause:
“This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than ________ on the ______ day of ________________ , (a.m./p.m.) 20 _____ , that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.”
It’s no longer an Offer at this point, it’s a conditional agreement.
There is another problem and it’s the date of the Agreement.
So, the Buyer’s agent drafts up an Offer on 15 November. It’s not submitted because the Buyer doesn’t have the money. Months go by, and an Offer is submitted on 22 February the following year. Yet it’s still dated 15 November. Some negotiations take place and it’s accepted on 17 March.
17 November: Buyer’s agent thinking about it
22 February: Buyer’s offer submitted
17 March: offer accepted, contract formed
So, what should we name the deal? The way it is now we refer to it as the 15 November Agreement. That’s rather silly! We should refer to it as the 17 March Agreement. That was the date of the deal. Up until then, the parties were simply negotiating.
Brian Madigan LL.B., Broker