Section 2 General Contract Requirements

• Library: Real Estate Fundamentals 2011

Before there can be a binding contract, there must be a meeting of the parties’ minds resulting in a contract sufficiently complete and definite 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 other than the deed of conveyance, and if those instruments are contingent upon the approval of either of the parties, there is no meeting of the minds at the time of the contract’s execution. P.R.T. Inv. Corp. v. Ranft, 252 S.W.2d 315 (Mo. 1952). Consequently, good practice dictates that a required lease, deed of trust, or note be prepared and attached to the contract. But see Cohen v. Crumpacker, 586 S.W.2d 370 (Mo. App. W.D. 1979), in which the Western District of the Court of Appeals distinguished P.R.T. and held that the seller’s approval of the form of a deed of trust was not required before a valid contract of sale resulted. The contrasting results of these two cases emphasize that any additional instruments required at closing should be prepared and attached to the contract.

Some sale contracts are void because they are unilateral and lack mutuality, reserving to one of the parties a right to cancel the contract. John P. Mills Org. v. Bell, 37 S.W.2d 680 (Mo. App. W.D. 1931). Contracts that are contingent on the purchaser’s satisfaction with the...