Sales, purchases and exchanges of realty are continually being made and engage the attention of owners, purchasers and brokers. These transactions usually are voluntarily entered upon and almost without exception are initiated by a contract embodying the terms of agreement. Consequently a thorough working knowledge of the contract, its purpose and effect, is essential to the owner who is about to sell, the proposed purchaser and the broker who is presumed to be protecting the interests of one or both parties to the transaction.
A contract for the sale or exchange of real estate must contain the attributes of any legal contract. Legally defined, a contract is a deliberate engagement between competent parties, upon legal consideration, to do or abstain from doing some legal act. An examination of the foregoing definition reveals four elements necessary for any contract:
1. Competent parties.
2. Offer and acceptance.
Contracts involving real property have one additional requisite:
5. Must be in writing and signed.