Bob acts for Sam the Seller and Mary acts for Bill the Buyer.
Bob and Sam sit together at Sam’s dining room table and go through the process of accepting Bill’s Offer. Mary and Bill are at Mary’s office.
8:00 pm Irrevocable time
7:30 pm Mary leaves Sam’s house
7:40 pm Sam decides to accept the Offer
7:41 pm Sam signs his name to the Offer (the seal is already in place)
7:42 pm Bob calls Mary and communicates the acceptance (this is step 2)
7:43 pm Bob advises Sam to sign the COA (which he does)
7:45 pm Bob emails the accepted Offer to Mary
7:46 pm Mary receives the email from Bob
This is the correct way to handle the deal. The communication (step 2) must take place prior to the expiry time of the Offer (8:00 pm).
The contract start time was 7:42 pm, even though the COA was signed one minute later.
But, for the purposes of the contract, Sam will be stuck with the 7:43 pm start time, because he wrote it in.
You will also appreciate that the two agents were aware of the timing of the email. They certainly could sign the COA since they would be in a good position to testify in terms of “delivery”. Bill could also complete the COA, effective the time it was received by his agent Mary. However, that would likely be hearsay.
Who should sign the COA?
The person who knows for sure that step 2 took place. Mostly, that will be Bill. Mary could sign the COA. She could look at her phone to see the time of Bob’s telephone conversation which would be 7:42 pm,
Is the COA part of the Contract?
No, it’s simply an evidentiary statement.
What if the COA is not signed?
Nothing happens, we still have a contract. We just need to figure out the starting time. However, it may not be crucial if the deposit was already delivered with the Offer (herewith).
What are we looking for?
The wording for the Seller is as follows:
“I, the Undersigned Seller, agree to the above offer.”
It’s this provision which binds them to the deal, as long as we have gone through step 2.
This is the statement which will be signed by both parties:
“I acknowledge receipt of my signed copy of this accepted Agreement of Purchase and Sale and I authorize the Brokerage to forward a copy to my lawyer.”
This statement is nice, but not necessary. In fact, it could easily by signed weeks after the start of the contract.
Rarely, is there a document similar to the COA.
Thousands of Years of Contract History
We have had contracts relating to the sale of land for thousands of years, and there was no COA until 2008. Those deals still got closed!