The standard form Agreement of Purchase and Sale sets out the following:
“PURCHASE PRICE: Dollars (CDN$) ………………
………………………………………………………………………………………………………. Dollars”
That seems simple enough. What could possibly go wrong?
The problem takes place after several back and forth alterations.
The property is listed at: $999,999.00
Buyer’s Offer: $950,000.00
Seller’s Counter $995,000.00
Buyer’s Counter $960,000.00
Seller’s Counter $990,000.00
Buyer’s Counter $975,000.00
Seller’s Counter $985,000.00
Buyer’s Counter $980,000.00
Seller’s Counter $982,500.00
Then, we apparently have a deal at $982,500.00. But, do we?
On the first line, it sets out $982,500.00 in numbers.
But, on the second line it still says Nine hundred and eighty thousand dollars.
Now, there are lots of initials on the front page:
- 7 from the Buyer
- 8 from the Seller
No Contract
We have a conflict on the first page, lots of changes, lots of writing, lots of initials, yet we seem to be missing the final deal. The words and numbers don’t match!
This means no agreement between the parties. One of the contract essential elements is missing, namely price.
Judicial Interpretation of Intention
If there were a contract in the first place, then, the Courts would review and interpret what they believed to be the mutual intention of the parties. But, not here! We don’t have a contract, so, there’s nothing to interpret. We are still “negotiating”.
How does this happen?
Actually, it usually takes place long after midnight when the two parties are still negotiating and both are quite tired. So, end the negotiations at 10:00 pm and resume them next morning.
The other complicating feature is 15 initials, and many different changes in numbers and words all on the front page. The document is now illegible. Stop using it.
Redraft a new Offer for the next Counter, or use the Counter Offer Form.
While we have a million dollar deal in play, this foolhardy method is rather cavalier.
Brian Madigan LL. B., Broker