Section 7 Basic Elements of Sale Contracts

• Library: Real Estate Fundamentals 2011

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 2000, prohibits aliens and foreign businesses from owning agricultural land in Missouri.

“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. Undoubtedly, 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 consideration be sufficient in law...