An Agreement of Purchase and Sale is a written contract between a seller and a buyer for the purchase and sale of a particular property. In the Agreement, the buyer agrees to purchase the property for a certain price, provided that a number of terms and conditions are satisfied. The process begins when the purchaser makes an offer, which is irrevocable for a certain time-period. If there are no counter-offers, the Agreement becomes a legally binding agreement if the offer is accepted by the seller, within the time-period set by the buyer. At this point, the Agreement cannot be cancelled unless both the buyer and the seller agree. Real estate matters such as purchase agreements can be complicated and usually involve large sums of money.
Because all agreements for the purchase and sale of land must be in writing to be legally enforceable, the Agreement provides a general layout for addressing the main issues. Most local real estate boards and the Ontario Real Estate Association have established standard form Agreements of Purchase and Sale. Although these forms contain standard terms and conditions, the Agreement can be changed if both the buyer and the seller agree and initial any additions or deletions.