Agreement of Purchase and Sale in Ontario: What You Need to Know

An offer to purchase is also commonly referred to as an agreement of purchase and sale.

An offer to purchase (or agreement of purchase and sale) outlines the terms upon which the buyer agrees to purchase the property from the seller. It takes the form of a written legal contract between two parties, being the buyer and the seller. Usually, an offer to purchase is a legal document drafted by a lawyer and witnessed by a third party. That means that the contract is legally binding, and that the purchase is subject to the terms outlined in the offer to purchase.

In addition, it often outlines the price upon which the buyer will buy the property from the seller. An offer to purchase can come in one of two forms — firm, or conditional.

A firm offer contains no conditions. The agreement is straightforward and clear cut. It outlines that the sale will take place and the way in which the sale will proceed. This type of offer does not outline specific conditions that need to be met in order to go ahead with the sale.

A conditional offer is subject to specific conditions outlined within the document itself. Usually, there is an indicated time period within which the conditions outlined in the conditional offer must be completed in order for the purchase to go through. With this type of agreement of purchase and sale, if the conditions are not met, then the buyer may back out of the deal.

The conditions outlined in a conditional offer may include, but are not limited to, financing, or the sale of an existing home.

For more information on offers to purchase or agreements of purchase and sale, contact Krol & Krol at 905.707.3370.