When is a Promise to Purchase contract considered formed?

A Promise to Purchase contract is considered formed when the buyer's broker receives a signed copy. This signifies that both parties—the seller and the buyer—have agreed to the terms laid out in the document, and the signature indicates their formal acceptance. The receipt of the signed document by the buyer's broker is a crucial step as it confirms that the contract has been executed according to the necessary legal standards and that both parties are bound by its terms.

Verbal agreements do not constitute a legally binding contract, as the law typically requires written evidence for such transactions, particularly in real estate. The deposit of funds alone does not create a contract; it often serves as a sign of good faith but is contingent on a prior agreement being reached. Similarly, mutual agreement without signatures lacks the requisite formalities that typically define a binding agreement in real estate transactions. Thus, the requirement for a signed copy serves to protect the interests of both parties and ensures that the agreement has legal standing.