Understanding what's on paper: Know the Basics of a Real Estate Contract

MANILA, Philippines - Mutual Assent – In every contract, there must be mutual assent, or a “meeting of minds”, which means an acceptance is made by the offeree in the exact terms, time frame and manner set forth by the offeror. In some cases, there will be a counteroffer from the offeree, and if this is not accepted exactly, there is no contract.

In Writing – Mutual assent must be accepted in writing. In general, a contract for purchase and sale of real estate must be in writing to be enforceable. Without a written agreement, the contract will not be binding if one of the two parties back out, even if an agreement was reached verbally.

Identifying the Parties – Full names and middle initials are commonly included in real estate contracts to prepare for the title. If one of the parties is a business entity, it should state its full business name registered under law.

Indentifying the Property – Although not commonly required, the legal description of the party should be stated in the contract. If the description is not specific enough, e.g. “vacation home in the Highlands”, it will not create a binding contract.

Purchase Price – The property’s purchase price or any reasonable ascertainable value must be stated in the contract.

Consideration - To be enforceable, a contract must have consideration, or the benefit, interest or value that induces a promise. 

Signatures – No contract is enforceable without a signature, and the signatory must be of legal age and sound mind at the time of the contract signing. Faxed signatures are accepted, as long as the contract states that signatures are valid.

Source: http://www.legalwiz.com