A buyer signs an agreement for sale and purchase on Monday as an offer, and the vendor signs it on Wednesday. When is the contract formed?
Correct Answer
C) When the vendor signs and that acceptance is communicated to the buyer
The Property Law Act 2007 does not say when a contract is made. Under the general law of contract, the buyer's signed agreement is an offer, and a binding contract is formed when the vendor accepts by signing and that acceptance is communicated to the buyer. Section 24 of the Act is the writing requirement: the contract must be in writing and signed by the party against whom it is enforced.
Why This Is the Correct Answer
Contract formation follows the general law: a signed offer is accepted when the vendor signs and that acceptance is communicated to the buyer, usually by the agent. Section 24 of the Property Law Act 2007 only requires the contract to be in writing and signed to be enforceable; it does not fix the moment of formation.
Why the Other Options Are Wrong
Option A: On Monday, as soon as the buyer has signed the written offer
The buyer's signature makes an offer only; there is no contract until the vendor accepts.
Option B: When the vendor's lawyer has reviewed and approved the signed agreement
A lawyer's approval is not needed for formation unless the agreement makes it a condition, and then it is a condition, not the moment of acceptance.
Option D: Only once both parties' lawyers have exchanged fully signed copies
Exchange of copies between lawyers is a practical step, not what forms the contract.
Deep Analysis of This Property Law Question
The question tests offer and acceptance in the context of an agreement for sale and purchase. Agents usually communicate acceptance, so the moment they tell the buyer (or deliver the signed agreement) often fixes when the contract exists.
Background Knowledge for Property Law
A buyer's signed agreement is an offer. The vendor can accept, reject or counter-offer; a counter-offer rejects the original. Acceptance must be communicated to form the contract. Separately, section 24 of the Property Law Act 2007 makes the contract enforceable only if in writing and signed. Rule 9.7 requires licensees to recommend legal advice before anyone signs.
Memory Technique
Remember 'signed and told': the vendor's signature is acceptance, and the contract is formed when that acceptance is communicated to the buyer.
When asked when a sale contract is formed, find the vendor's acceptance and its communication, not the buyer's signature or a lawyer's review.
Exam Tip for Property Law
Don't attach a section number to formation. Section 24 of the Property Law Act 2007 is about writing and enforceability, not when the contract is made.
Real World Application in Property Law
A buyer signs an offer on Monday. The vendor signs it on Wednesday evening, and the salesperson emails the signed copy to the buyer at 8 pm. The contract is formed when the buyer receives that acceptance, and the dates for conditions run from the agreement date.
Common Mistakes to Avoid on Property Law Questions
- •Thinking the buyer's signature alone creates a contract
- •Believing lawyers must approve before a contract exists
- •Attributing formation rules to the Property Law Act
Related Topics & Key Terms
Key Terms:
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