Suppose you go to buy a house. You give the broker a check for a small amount ($1,000 is common) and sign a purchase offer (two to four pages) that says that you and the seller will sign a formal purchase and sale agreement (the "long form") later. The seller accepts the offer.
When it comes time to sign the "long form" you would like to add some provisions - perhaps the roof should be repaired, the sprinkler system needs to be fixed, the kitchen needs to be refurbished, you need to sell your house on the same day, etc. If the seller plays hardball, you may be out of luck, because the purchase offer may be the contract, without the long form.
Similarly, suppose you are the seller. After the purchase offer has been signed, you remember you want to keep the chandelier in the dining room, or a better offer comes along. Perhaps the long form does not get signed by the date specified. Don't assume that you can proceed with the better offer - the purchase offer may be the contract.
In the case of McCarthy v. Tobin, the Supreme Judicial Court held that if the purchase offer is accepted, and it contains the necessary information (the property, the price, the deposit, the date the offer expires, how the offer is to be accepted, the title to be conveyed, and the time and place for delivery of the deed), the accepted purchase offer is an enforceable contract. The "long form" is not needed.
Most of the time the provisions that do not appear in the purchase offer and are added in the long form are routine and agreeable to both parties. However, if the parties do not agree on a particular provision, the result can be a serious and expensive problem, and may result in litigation.
Before you sign the purchase offer, make sure that it contains everything you want to rely on, because you may not be able to add anything later. In our office, we often proceed directly to the preparation of the long form, and do not have the client sign the purchase offer at all.
