The GAR 2022 Purchase and Sale Agreement (PSA) includes changes that clarify the Binding Agreement Date and have added a process to object to the date entered.
Sending Notice of Acceptance
The PSA defines the Binding Agreement Date as the date when a party to the transaction, who has accepted an offer or counteroffer, delivers notice of that acceptance to the party who made the offer or counteroffer. Notice may be delivered by either party or the Brokers working with or representing the parties to the other party. Sending a fully signed purchase and sale agreement with a specific Binding Agreement Date included, that one of the parties has agreed to, constitutes notice of the Binding Agreement Date to the other party.
Objecting to a Binding Agreement Date
A new provision has been added to the 2022 PSA (at page 6, section 4k) that outlines a process to object to a binding date that has been entered as the Binding Agreement Date.
“4k. Objection to Binding Agreement Date: If the Buyer or Seller objects to the date entered as the Binding Agreement Date, then within one (1) day from receiving notice of Binding Agreement Date, the party objecting shall send notice of the objection to the other party. The objection shall be resolved by the written amendment between the Buyer and Seller by executing a binding agreement date confirmation (F733). The absence of an agreement on the Binding Agreement Date shall not render this Agreement unenforceable. The failure of a party to timely object will result in the parties accepting the Binding Agreement Date as entered.”
1 Day Objection Period
Remember that any objection must be done within 1 day or the objection is waived and the Binding Agreement Date is accepted as entered. A Notice form is the proper document to use for the objection. Be sure to include the reason for the objection. Review the paperwork and object immediately if it is believed that the date is not accurate.
Once the date is agreed, the parties must amend the contract using a Binding Agreement Date Confirmation, GAR F 733.
The Contract is Still Valid
If the parties cannot agree on a Binding Agreement Date, the contract is still valid and can proceed, even though the Binding Agreement Date is not resolved. Most parties will agree on a Binding Agreement Date so the time periods that depend on an accurate date can be set.
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