Author: The offer and acceptance contractUnder Western Australian law, the Offer and Acceptance Contract is a requirement when making a written offer to purchase property, but what exactly does it entail?
Understanding the Offer and Acceptance Contract
The legally binding Offer and Acceptance Contract contains two physically separate documents that make up the contract, both of which are equally weighted in importance.
1.The Contract for Sale of Land or Strata Title by Offer and Acceptance sets down the terms and conditions under which the purchase and sale of a property will be completed.
2.The Joint Form of General Conditions for the Sale of Land is the legal part of the contract and details the rights and obligations of the buyer and seller during the pre-settlement period.
Once a price is agreed to, a copy of the Contract for Sale of Land or Strata Title by Offer and Acceptance and the Joint Form of General Conditions for the Sale of Land is given to all relevant parties.
The contract is not legally binding until the Contract for Sale of Land or Strata Title by Offer and Acceptance has been signed by all relevant parties and communication of its acceptance is conveyed to everyone involved.
What are the terms of the contract?
Making a formal offer on a home is a huge decision and one that you shouldn’t enter into lightly.
When making the offer, you will need to consider the following things:
◦What is the total amount you are offering to pay?
◦Will you be making a deposit, and if so, how much?
◦How will you pay for this purchase?
◦What settlement date will you nominate?
◦Are there any special conditions you want to insert into the contract?
You will also need to consider the terms, or general conditions that are contained in the General Conditions booklet.
These conditions include the amount of any rate and taxes you are required to pay to the seller in the first year, as well as what happens if either party does not go through with the contract and what happens if settlement is delayed.
We strongly advise you seek professional legal advice before signing the contract. Legal advice is particularly helpful when adding new terms and conditions to the contract and removing those that do not suit you.
It is also wise to have all parties to the contract initial any changes where an agreement has been reached.
If you would like further information about the Offer and Acceptance contract, read the Sale by offer and acceptance brochure by the Department of Commerce.