Using the Correct Documents
Sometimes, even when the two sides are working together very successfully, they just run out of time. Well-intentioned, but the acceptance just wasn’t finished off in time.
So, what’s the remedy? How do we fix this?
Bob and Mary acting for the Buyer and the Seller respectively were working on a deal. Bob submitted an Offer. Mary’s client wanted an additional $10,000.00. The documents were sent back to Bob. Initially, Bob’s Offer, called for acceptance by 8:00 pm. The signback from Mary’s clients moved the irrevocable to 10:30 pm.
Bob rushed across town and got his clients to sign and accept at 10:15 pm. Unfortunately, a few little technical problems delayed the transmission of the acceptance to Mary until 10:40 pm. This means that we have no deal. There is no Agreement of Purchase and Sale. Remember we need to communicate the acceptance to the other side. You can’t just keep quiet about it. Mary needs to know by 10:30 pm. In this case, there’s just an Offer which was not accepted in time.
What are our choices:
- Brand new Offer, start to finish on Day 2,
- Counter-Offer, Day 2,
- Amendment to revive Agreement of Purchase and Sale, on Day 2, and
- Back Date the acceptance time on Day 1, or even on Day 2.
There are ONLY two legal and acceptable solutions, and they are #1 and #2 above.
You can’t “revive” anything. There is nothing to amend. An Offer simply was not accepted within the correct time frame.
Also, most of the time, in most situations “back dating” is illegal. Here, in this situation it is illegal, unauthorized and fraudulent. So, now that you know that for sure, let’s not discuss it any further. However, as you might imagine, the only reason I raise it, is that it has been “suggested” many times.
Brand new Offer, start to finish on Day 2
This is the perfect solution, start afresh on Day 2. Date the document as of Day 2 and complete all the signatures and initials over the 15 pages from start to finish.
Counter-Offer, Day 2
In this case, we are going to use a one page document. We already have 15 pages and we are going to use them. We don’t have to sign them again. It has Day 1 signatures and initials already in place.
We are going to use the OREA Standard Form Counter Offer, Form 107.
There is one little problem with the Counter-Offer Form. It says “accepts” when I believe it should say “adopts”. You might be able to change that on the Document itself, by simple deletion and replacement or even by strikethrough. That depends upon the software program that you are using and/or whether you have physical copies.
Here’s the exact wording that you will find: “The Seller accepts the attached Agreement and all its terms and conditions subject to the following amendments, exceptions and/or additions:…”. We are going to change or amend that by including the following in the open box:
Delete: “The Seller accepts the attached Agreement and all its terms and conditions subject to the following amendments, exceptions and/or additions:”
Insert: “The Seller agrees and adopts the Offer as submitted by the Buyer evidenced by the Offer dated 22 January 2019,attached and marked as Appendix A hereto, including 15 pages comprising the Offer, Schedule A, Schedule B and the Confirmation of Cooperation and Representation, signed by the Buyer effective 10:15 pm, and communicated to the Seller at 10:40 pm; subject only to the acceptance of this Counter-Offer from the Seller to the Buyer by 8:30 pm 23 January 2019”.
Remember that the attachment already includes the $10,000.00 increased price.
We are referring to the attachment as an Appendix, simply because using the term “Schedule” would be confusing.
This approach gives us a one page patch. Sometimes, that may be advantageous.
Brian Madigan LL.B., Broker