Clear and honest communication from all involved and throughout the entire purchase process is critical to closing the deal and ensuring that all parties walk away satisfied. When communication breaks down the deal can break down.
Recently an estate agent related the following experience to me:
A Purchaser signed an offer to purchase and the agent presented the offer to the Seller, who had until 5.00 pm on 20 May to accept the offer.
At 12h00 on 20 May (i.e. 5 hours before expiry) the Seller accepted the offer by signing the agreement and left a message on the agent’s cellphone to advise her of his acceptance. The agent listened to her voicemail messages on the morning of 21 May and immediately contacted the Purchaser to advise him that his offer had been accepted.
To the agent’s horror, the Purchaser advised that as the acceptance had not been communicated to him prior to 5.00pm on 20 May his offer had lapsed and he was no longer interested in purchasing the property at that price.
The question that arises is: Is the contract concluded as soon as the Seller signs the agreement OR only once the Seller or the agent has communicated acceptance of the offer to the Purchaser?
The legal position is as follows :
As a general rule a contract is concluded only when the Seller has communicated his acceptance of the offer to the Purchaser. This means that if a Seller signs an offer to purchase (thereby purporting to accept the offer), the contract is not concluded unless the Seller has notified the Purchaser that the offer has been accepted prior to the expiry of the offer.
This leads to my next topic: What type of notification is required?
- Concluding the Purchase of Property: Communication Is Key (part 1) (homeloansouthafrica.wordpress.com)