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    o be done, by the other party. A Contract of Purchase and Sale is in essence an exchange of promises. The Seller promises to convey title to the land to the Buyer on completion date, and the Buyer promises to pay the purchase price to the Seller on the same date. Thus, paying a deposit i
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    There is a trend in the industry in this day and age of not taking deposits from Buyers, when it comes to servicing accepted offers prior to the conditions precedent being removed. The rationale behind this is to make the offer ‘less onerous’ on Buyers. Additionally, there is the widespread belief that since once a deposit is received the brokerage firm must open immediately a trust account, all this may become wasted effort in the eventuality that the conditions precedent are not removed by the Buyer.

    A deposit is the amount of money normally paid by a Buyer at the time the offer is signed, or alternatively a short time after the offer has been accepted by the Seller. Many people wrongly believe, that unless a deposit is paid when the offer is made, there is no binding contract. This is untrue.

    The three main requirements for a contract are offer, acceptance and consideration. The offer and acceptance are pretty clear, but some confusion exists as to what consideration really is. Consideration is something to be done, or promised to be done, by one party in return for something to be done, or promised to be done, by the other party. A Contract of Purchase and Sale is in essence an exchange of promises. The Seller promises to convey title to the land to the Buyer on completion date, and the Buyer promises to pay the purchase price to the Seller on the same date. Thus, paying a deposit is

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    widespread belief that since once a deposit is received the brokerage firm must open immediately a trust account, all this may become wasted effort in the eventuality that the conditions precedent are not removed by the Buyer.

    A deposit is the amount of money normally paid by a Buyer at the time the offer is signed, or alternatively a short time after the offer has been accepted by the Seller. Many people wrongly believe, that unless a deposit is paid when the offer is made, there is no binding contract. This is untrue.

    The three main requirements for a contract are offer, acceptance and consideration. The offer and acceptance are pretty clear, but some confusion exists as to what consideration really is. Consideration is something to be done, or promised to be done, by one party in return for something to be done, or promised to be done, by the other party. A Contract of Purchase and Sale is in essence an exchange of promises. The Seller promises to convey title to the land to the Buyer on completion date, and the Buyer promises to pay the purchase price to the Seller on the same date. Thus, paying a deposit i

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    er at the time the offer is signed, or alternatively a short time after the offer has been accepted by the Seller. Many people wrongly believe, that unless a deposit is paid when the offer is made, there is no binding contract. This is untrue.

    The three main requirements for a contract are offer, acceptance and consideration. The offer and acceptance are pretty clear, but some confusion exists as to what consideration really is. Consideration is something to be done, or promised to be done, by one party in return for something to be done, or promised to be done, by the other party. A Contract of Purchase and Sale is in essence an exchange of promises. The Seller promises to convey title to the land to the Buyer on completion date, and the Buyer promises to pay the purchase price to the Seller on the same date. Thus, paying a deposit i

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    act are offer, acceptance and consideration. The offer and acceptance are pretty clear, but some confusion exists as to what consideration really is. Consideration is something to be done, or promised to be done, by one party in return for something to be done, or promised to be done, by the other party. A Contract of Purchase and Sale is in essence an exchange of promises. The Seller promises to convey title to the land to the Buyer on completion date, and the Buyer promises to pay the purchase price to the Seller on the same date. Thus, paying a deposit i
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    o be done, by the other party. A Contract of Purchase and Sale is in essence an exchange of promises. The Seller promises to convey title to the land to the Buyer on completion date, and the Buyer promises to pay the purchase price to the Seller on the same date. Thus, paying a deposit is not a requirement at law for a contract to be binding on the parties to it.

    A deposit is part of the down-payment of the Buyer, that is the portion of his own money the Buyer uses, that does not involve financing. It can be any amount or, sometimes, no amount at all as in the case of a one-hundred percent financing transaction.

    If the Seller refuses the offer, the deposit must be returned to the Buyer forthwith. This is done by the broker drawing a trust cheque on his trust account. A problem arises when the original deposit cheque is uncertified. The broker would be unwise to issue a cheque on his trust account, until he knows that the deposit cheque from the Buyer has been honored. In the meanwhile the Buyer will likely be annoyed, because he probably cannot make another offer on a different property until the deposit is returned from the broker.

    There are two ways to avoid this inconvenience to the Buyer. The prospective purchaser can be advised to pay the deposit in cash, or by money order or certified cheque. Or a very small deposit, or no deposit at all is obtained at the time the offer is signed. However, the

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