Offer to Purchase Documents are Legally Binding!   The first step in any purchase or sale transaction is the execution of an Offer to Purchase. It is important that buyers and sellers understand the significance of this document which is a valid contract that imposes binding obligations on all parties to the agreement. It is a basic principal of contract law that a valid contract is created when 3 things occur: 1) offer, 2) acceptance and 3) consideration. Therefore, once an offer is accepted and a deposit (whether it is $1,000 or $1.00) is tendered, a valid contract is created. The recent Massachusetts Supreme Judicial Court case of McCarthy vs. Tobin made this point very clear even in the instance where the offer contained several conditions including the execution of a mutually agreeable Purchase and Sale agreement ("P&S"). The court concluded that the Offer to Purchase contained all of the material terms essential to the transaction and that the parties intention was to be bound and that execution of a P&S was merely a formality. Based upon this case, if it is the parties intention not to be bound by an offer, it is crucial that the Offer to Purchase form clearly state that the parties do not intend to be bound until the execution of a mutually acceptable P&S.   Craig Gilmartin Gilmartin, McGence & Ross 376 Boylston Street Boston MA 02116 Tel: (617) 375-9000 Fax: (617 375-5700 Email: cgilmartin@gmcrlaw.com Web: www.gmcrlaw.com