In my experience as a conveyancer it has become apparent to me that many buyers and sellers of immovable property do not fully understand the legal implications and consequences of the contract which they sign when buying or selling property. This is understandable as such contracts contain a lot of “legal jargon” which most people are not familiar with. For many people such contracts are one of the most important transactions they conclude during their lifetime and I believe that it may be useful to devote space in this column to explaining some of the most important terms and conditions contained in a standard contract relating to the sale and purchase of immovable property.
This will be the first in a series of articles relating to this subject. Before dealing with the standard terms and conditions themselves it is important to note that the law requires such contracts to be in writing and to be signed by both seller and purchaser or their agents acting on their written authority. No verbal agreements in respect of the sale and purchase of immovable property can ever be binding on either the seller or the purchaser. Furthermore any amendments to such contracts must also be in writing. No verbal agreement to amend such a contract is binding on either the seller or the purchaser. It is also important to understand the terms “Offer to Purchase” and “Deed of Sale” (or Agreement of Sale).
Most sales are negotiated by estate agents and most contracts are entered into on standard Offers to Purchase or Deeds of Sale provided by the agent. Some people seem to think that there is a distinction between the two and that the legal consequences of signing an Offer to Purchase differ from the consequences of signing a Deed of Sale. In fact I have been told by a number of people that they were not aware that they were signing a binding agreement when they signed an Offer to Purchase. The fact of the matter is that there is no real difference between the two. Usually the purchaser signs the contract first and it is then submitted to the seller for consideration. Once the seller has signed the contract and this fact (i.e. that the seller has signed), has been communicated to the purchaser, a legally binding agreement comes into existence between the seller and the purchaser.
Neither party can thereafter withdraw from (cancel) the contract. It makes no difference whether the contract has “Deed of Sale” or “Offer to Purchase” written on it. A Deed of Sale or Offer to Purchase when signed by the purchaser is simply a written offer by the purchaser to the seller to purchase the property upon the terms and conditions contained in that written contract. The seller indicates his acceptance of the offer by signing the contract. As a general rule the purchaser can withdraw his or her offer at any time before the seller has signed the contract. This applies unless the contract contains a clause which states that the purchaser has agreed to keep the offer open for a specified period. In such cases the purchaser cannot withdraw the offer until this specified period has expired.
If the seller signs the contract during this period it becomes binding on the purchaser. In next weeks column I will discuss some basic guidelines relating to the completing and signing of Deeds of Sale. (572)