3.7 Basic Elements of Sale Contracts

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

B. (§3.7) Basic Elements of Sale Contracts

The basic elements in a sale contract are as follows:

• Proper designation of the parties

• Sufficient description of the property so that it can be identified with reasonable certainty
• Agreement on price and terms

• Sufficient consideration flowing to and from each party to the contract

• Time, place, and manner of performance

The parties should be specifically and clearly identified. Counsel should remember that § 442.571, RSMo 2016, restricts the ownership of agricultural land in Missouri by aliens and foreign businesses.

"Sufficient consideration" does not necessarily mean "adequate consideration." In addition to the price to be paid for the property, there must be sufficient consideration at the time the contract is executed to bind the parties to the contract. While a promise for a promise, if each is definite and certain, will be sufficient, Burger v. City of Springfield, 323 S.W.2d 777 (Mo. 1959), the consideration is often the earnest money paid by the purchaser. This requirement has given rise to the use of the term "earnest money contract" rather than "sale contract," "contract of sale," or "contract for sale."

While consideration is an essential ingredient, it does not necessarily have to be money; it is only necessary that the...