Why are real estate deals negotiated in writing? 

The first reason people negotiate real estate deals in writing is because written agreements are enforceable. Under the Ontario Statute of Frauds, oral agreements for the purchase or sale of land generally lack legal enforceability. In law, an oral offer to buy or sell does not bind the person making the offer until both the seller and the buyer document and accept it in writing. Oral negotiations carry no binding legal effect.

A counter-offer happens when one party revises a written offer and the other party signs it back. This exchange can happen multiple times. Both parties reach an agreement—whether conditional or unconditional—when one party accepts all revisions from the other without further changes. The deal becomes ‘firm’ once the parties satisfy or waive all conditions. While a few exceptions to the ‘in writing’ rule exist (such as equitable claims like resulting or constructive trust), they require strong evidence, time, and significant legal costs to pursue.

The Importance of Clearly Stated Terms

Another important reason for using a written agreement is to ensure both parties fully understand and agree on all essential terms. When a deal lacks clearly defined terms, it risks becoming legally unenforceable.

When a written document clearly states the names of the parties, a property description, the price, and the agreed terms, it provides solid evidence of the parties’ mutual intent. Written records also help confirm whether the agreement is complete and legally sound. If the buyer and seller do not share a mutual understanding (consensus ad idem) of the essential terms, the deal likely holds no legal validity. Relying on each party’s memory of oral discussions only increases uncertainty and weakens the deal’s legal standing. That’s why real estate offers and agreements should always be made in writing.

Other Legal Risks in Real Estate Deals

Several other legal reasons also support the use of written agreements in real estate. For instance, the Ontario Planning Act may invalidate deals that fail to include explicit written conditions for compliance. In future articles, we’ll explore other essential clauses that influence the validity and interpretation of purchase and sale agreements in Ontario.

Disclaimer:
These insights are provided for general informational purposes. They do not replace legal advice. Please consult a qualified legal professional for your specific situation. Readers should conduct their own research before acting on any information in this article. The author may revise opinions or positions over time. Use this content at your own risk.

You are the buyer or the seller, and the other party makes an offer in writing. You then respond by delivering a counter-offer on terms more favourable to you. Can you then change your mind and accept the other party’s prior offer?

In general (in the absence of an unusual promise by the other party to keep their offer open), the answer is ‘no’—because the law considers your counter-offer as a rejection of the other party’s prior offer, which removes it from being available for acceptance.

Why Counter-Offers Cancel Previous Offers

Because of this legal outcome, it is important that you carefully consider whether making a counter-offer is a wise choice. Of course, if your counter-offer includes new terms that matter to you, then you’ll likely move forward with it. However, if the new terms are extremely minor, you risk losing the deal by making a counter-offer.

Disclaimer:
The issues raised are for information purposes only. My comments should not be relied upon to replace specific legal advice. Readers should investigate all matters independently before acting on the basis of the material contained in this article. I reserve the right to be wrong and to change my mind. Use at your own risk.