Offer and Acceptance

An offer is made when a potential buyer presents a purchase contract to a seller. If the seller signs the purchase contract without alteration and communicates his or her acceptance to the buyer in the manner stipulated and within the time limited for acceptance, the offer is accepted.

Any alteration to the purchase contract before acceptance constitutes a counteroffer that requires acceptance, either within the original time limited for acceptance, or within a newly specified time for acceptance of the counteroffer. A counteroffer, before acceptance of any prior offers, automatically terminates the prior unaccepted offer or counteroffer.

If an offer or counteroffer is not accepted within the time limited for acceptance, a binding contract is not formed. Consequently, in cases where the parties have exchanged several offers and counteroffers, it may not be possible for the lawyer to determine whether a binding contract has been formed in law simply by examining the purchase contract and without reviewing the addendums.

The answer to whether there has been proper acceptance of the purchase contract must be found in the wording of the purchase contract. Most purchase contracts, including the Contract of Purchase and Sale, provide that there will be a binding contract of purchase and sale upon acceptance of the offer or counteroffer in writing, and upon notifying the other party of such acceptance.

Mark Fidgett is a Vancouver mortgage broker and the driver behind www.NotaPennyDown.com

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