Contracts, Purchase Agreements, and Transactional Documents
Contract basics
A valid purchase agreement requires offer, acceptance, consideration (earnest money is evidence of it), competent parties, legal purpose, and a writing signed by the party to be charged that identifies the property - Minnesota's statute of frauds. The Minnesota Realtors purchase agreement is a widely used private form, not a state-mandated document; parties may use any lawful form. Core components: price, financing terms, earnest money, closing date and place, title review, inspection and cancellation rights, and contingency deadlines.
A counteroffer operates as a rejection of the original offer and creates a new offer, so a seller who counters cannot later simply accept the buyer's original terms. Acceptance must be communicated and must match the offer; silence is not acceptance. Electronic signatures are valid under Minnesota's UETA and E-SIGN. Deadlines generally run from the date of final acceptance, and 'time is of the essence' language makes dates enforceable. Contingencies protect the buyer's earnest money only if the buyer cancels in writing within the stated window.
Traps
- Counting calendar days when the contract says business days.
- Treating earnest money as optional, or as the seller's before closing.
- Letting a licensee draft contract language - licensees complete forms, they do not practice law.
- Forgetting that agency disclosure and statutory property disclosures must be delivered before signing.
Rule of thumb
Identify the trigger date, count only the type of days the contract specifies, and put the resulting deadline in writing to the client.
Worked example
An offer is accepted Friday, June 5, with five business days to inspect and cancel. If the contract excludes weekends, the clock starts Monday, June 8, and the fifth business day is Friday, June 12 - written cancellation must be delivered by then to protect the earnest money.