Purchase Or Sales Offer For Real Property
It is a very common practice that a person who finds real property that meets their expectations will want to purchase it. To get started, they usually request that the realtor or attorney make an offer to the owner of the real property they wish to purchase.
In turn, a real-property owner may likewise place the real property up for sale at a specific price.
In this article, we will discuss the obligations incurred by the contracting parties in transacting a Purchase or Sale Offer.
WHAT IS “CONSENT”?
In order to better understand an “offer”, we should first point to the concept of “consent”, which is defined as a mutual assent, the concurrence of wills or consensus ad idem (meeting of the minds), that creates or conveys in rem rights or personal rights.
WHAT IS THE “OFFER”?
An offer is the proposal for entering into a contract to a third party.[1]
In order for consent (or mutual assent) to exist in an offer, the Offer must be met with an acceptance that is plain and simple (an expression of absolute and unconditional agreement to all the terms set out in the Offer), i.e., there does not purport to be any modification (change or amendment) whatsoever to the Offer.[2]
OFFER BETWEEN PARTIES PRESENT
The Offer is divided into the following:
1. Offer without setting a Term.
2. Offer with a Term.
3. Offer made by Telephone.
4. When the Offering Party is deemed released from his/her offer.
Offer Without Setting a Term.
As set forth in Article 1002 of the Civil Code of the State of Yucatán, if an offer is made to a person present without the setting of a Term for acceptance, the Offeror shall thereupon no longer be legally bound if said Offer is not accepted forthwith.
Offer with a Term.
The Offeror is legally bound by his/her offer until the expiration of the Term, as provided in Article 1001 of the Civil Code of the State of Yucatán, which states, in verbatim:
Article 1001 - Every person who proposes entering into a contract to another, setting a Term for its acceptance, is thereby legally bound by his/her offer until the expiration of such Term.
Offer Made By Telephone.
Just as the Offer without setting a Term ends if the Offeror does not receive immediate acceptance, so too does the Offer made by telephone or by any other means of communication whereby an immediate response can be obtained.
When the Offering Party is Deemed Released from His/Her Offer.
The Offering Party shall be deemed released from his/her offer when the response to same is not met with an acceptance that is plain and simple (an expression of absolute and unconditional agreement to all the terms set out in the Offer), but rather implies a modification (amendment or change) to the Offer.[3]
In such case the response shall be considered a new proposition (a counteroffer).[4]
OFFER BETWEEN PERSONS NOT PRESENT
The Offer can be made between persons not present. In this case, there are two kinds:
An Offer without a Term
An Offer with a Term
Offer without a Term
When an offer is made to a person not present without setting a Term, the Offeror shall thereby be legally bound for five (5) days.
If the Offer is sent by mail, the Offeror shall be legally bound for such period of time as is necessary for the normal mailing and returning of public mail; or, there being no public mail, such period of time as the judge may deem sufficient, depending on the distance and the ease or difficulty involved in communication.
Offer with a Term
In this case, the Offeror is legally bound by the time period set forth therein, and as set forth in Article 1003 of the Civil Code of the State of Yucatán which states, in verbatim:
Article 1003. - If the Contracting Parties are not present, [the Offer] shall be accepted within the Term set by Proponent.
WHAT HAPPENS IF THE OFFER IS ACCEPTED BY THE RECIPIENT WITHOUT ANY MODIFICATION (AMENDMENT OR CHANGE) WHATSOEVER?
The Offer becomes a Contract, i.e., it is given proper form (formalized, executed) upon the Offering Party’s acceptance, and said Party thereupon being legally bound to comply with the terms and conditions as set forth in his/her Offer.
WHAT HAPPENS IF THE OFFERING PARTY DIES ONCE THE OFFER HAS BEEN ACCEPTED?
Pursuant to Article 1007 of the Civil Code of the State of Yucatán, if the Proponent has died at the time of acceptance, the heirs of said Proponent shall be legally bound to uphold the Contract (executed Offer).
This supposition, however, applies when the Offeree has no knowledge of the death of the Offeror; as such, should it be proven that Offeree had knowledge of the death of the Offeror, the heirs of the latter shall no longer be legally bound by said Offer.
HOW CAN I LEGALLY WITHDRAW AN OFFER IF IT WAS ALREADY DELIVERED TO THE OFFEREE?
Pursuant to Article 1006 of the Civil Code of the State of Yucatán, the Offer shall not be deemed made if Offeror withdraws same and Offeree receives said withdrawal prior to receiving the Offer. The same rule shall apply in the case of the acceptance being withdrawn.
WHAT INFORMATION SHOULD BE INCLUDED IN A PURCHASE OFFER?
We recommend including the following:
1. Object. Description of the real property, in such a way so as to not give rise to misinterpretation.
2. Price.
3. Form of payment. Whether effected as a one lump-sum payment, payment in installments, etc.
4. Ordinary Interest and Interest on Arrears, if applicable.
5. Conditions for Purchase. For example, that the real property be unencumbered, that taxes be paid, that improvements be made on the real property, etc.
6. Effective Term of the Offer.
7. Submission. In the event of a dispute, establish which courts will have competent jurisdiction on the matter.
CONCLUSION
The intent of this article is to convey the legal elements of an Offer and its legal consequences, in order that a correct decision be made at the time of drawing up an offer.