Why Real Estate Agreements Must Be 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.

*** This article was reviewed and contributed to by Bruce E. Bussin, Solicitor.
Bruce Bussin is a practicing lawyer based in Toronto, Ontario, with experience in real estate law and other legal matters. Learn more about Bruce Bussin here.

• Office: 416-364-4925

• Email: Bruce@bussinlaw.com