3.2 General Contract Requirements

• Library: Real Estate Practice Deskbook (2019 Ed.)

B. (§3.2) General Contract Requirements

To have a binding contract, there must be a clear, mutual understanding and a positive assent between the parties resulting in a contract sufficiently definite and complete in its terms that a court of equity could enforce it by a decree of specific performance. If the contract requires the preparation of instruments besides the deed of conveyance, and if those instruments are contingent upon the approval of either of the parties, there is no mutual understanding and assent between the parties at the time of the contract's execution. P.R.T. Inv. Corp. v. Ranft, 252 S.W.2d 315 (Mo. 1952). Good practice therefore dictates that an essential deed of trust, promissory note, or lease be attached to the contract. But compare Cohen v. Crumpacker, 586 S.W.2d 370 (Mo. App. W.D. 1979), in which the Western District of the Missouri Court of Appeals held that the seller's approval of the form of a deed of trust was not required to have a valid contract of sale, distinguishing it from P.R.T. The different results of these two cases highlight that any additional instruments needed at closing should be prepared and attached to the contract at the time of execution.

Some sale contracts are void because they reserve to one of the parties a right to cancel the contract and are therefore unilateral and lack mutuality John P. Mills Org. v. Bell, 37...