Contract of Sale

A contract of sale is a legal contract by which a seller agrees to sell and a buyer agrees to buy, under certain terms and conditions spelled out in writing in the document signed by both parties. An invoice, for example, is a contract of sale. Also called agreement of sale, contract for sale, sale agreement, or sale contract.‎ It is a contract for the exchange of goods, services or property that are the subject of exchange from seller (or vendor) to buyer (or purchaser) for an agreed upon value in money (or money equivalent) paid or the promise to pay same. It is a specific type of legal contract
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There are several legal documents that are part of the conveyancing process and must be completed in order for a real estate transaction to be completed. One of the most important of these documents is the Contract of Sale. This document sets out the terms and conditions agreed upon between the buyer and seller in a clear and concise manner.

The Contract of Sale should be prepared by a solicitor. If you are selling your property, you’ll want to choose a property lawyer who has the experience and sales savvy to create a solid contract.

What is Included in a Contract of Sale?

There are several details that will be included in a typical Contract of Sale, these include the following:

Conditions of the sale, such as financing information or additional building inspections

The names of the vendor and purchaser

The property’s address

The amount of deposit that must be paid

The sale price of the property

The date of the property settlement

Whether the property will be available as a vacant possession, or if it is subject to a lease

Other personal property sold as part of the package deal

How is the Contract of Sale Completed?

The purchaser usually signs the Contract of Sale first. They submit their offer to the seller, which includes price and any additional conditions. From the moment the buyer signs the contract, it becomes a legal and binding document. It’s important to note that although it won’t be activated until signed by the vendor as well, it is still binding with only one signature. Some buyers believe that this is merely an offer to be presented, but as the offer is being submitted in the form of a legal contract, it binds the purchaser from the moment they sign it. From this point, the only way that the buyer can get out of this contract is if they revoke the offer before the vendor signs it, or if the vendor chooses to reject the offer. It’s a good idea for the buyer to ask their solicitor or conveyancer to look over the Contract before signing for this reason.

Another important detail to consider is the date on which the purchaser signs the contract. This is the date when the three-day cooling off period starts. Many people mistakenly believe that the cooling off period doesn’t begin until the vendor signs, but that’s not the case.

The initial Contract of Sale is usually prepared on the selling side, either by the seller’s real estate solicitor. The details such as selling price and settlement date are left blank, so that they can be filled in by the purchaser who is making the offer.

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