## Facts

- A buyer signed a preprinted residential real estate “Offer to Purchase” (OTP) stating the property, price, deposit terms, limited title terms, and a closing date and place.
- The OTP stated the parties “shall” execute a standard purchase and sale agreement by a specified date and time; it also included “time is of the essence.”
- The OTP also included an added term: “Subject to a Purchase and Sale Agreement satisfactory to Buyer and Seller.”
- Immediately above the signature lines, the form warned it was a legal document creating binding obligations; the form characterized the buyer as “offering” and the seller as “accepting.”
- The seller signed the OTP within the acceptance period.
- The first draft of the purchase and sale agreement was sent after the OTP’s stated deadline, and the parties’ attorneys continued negotiating without objecting that the deadline had passed.
- The buyer later signed the negotiated purchase and sale agreement and tendered it with the deposit.
- Before receiving the buyer’s tender, the seller accepted a later offer from other purchasers and refused to proceed with the buyer.
- The buyer sued for specific performance; the trial court entered summary judgment for the seller and later purchasers; the intermediate appellate court ordered judgment for the buyer; the state high court granted further review.

## Issues

1. Whether a signed OTP containing essential real estate terms constituted a binding contract, or merely a nonbinding agreement to negotiate a later purchase and sale agreement.
2. Whether the seller waived the OTP’s “time is of the essence” deadline for executing the later purchase and sale agreement by continuing negotiations and transmitting drafts after the deadline without objection.

## Decision

- The court held the OTP was a binding contract upon the seller’s acceptance.
- The contemplated purchase and sale agreement was a later formalization of obligations already created, not a condition precedent to contract formation.
- The “subject to a purchase and sale agreement satisfactory to buyer and seller” language did not negate present intent to be bound; it required good-faith cooperation toward a more detailed document consistent with the OTP.
- The seller waived the execution deadline by conduct inconsistent with strict enforcement, including sending the first draft after the deadline and continuing negotiations without objection.
- The buyer’s later tender of the signed agreement and deposit was timely given the waiver.
- The buyer was entitled to specific performance; judgment was ordered for the buyer notwithstanding the seller’s later agreement with subsequent purchasers.

## Legal Principles

- A signed offer to purchase for real property can be an enforceable contract if it reflects present intent to be bound and includes essential terms such as property identification and price.
- Language contemplating a later, more detailed purchase and sale agreement does not prevent contract formation when the later document is intended to memorialize or implement an already binding deal.
- A “time is of the essence” deadline may be waived by conduct, including continuing performance-related negotiations after the deadline and proceeding without objection to lateness.
- When a seller has an enforceable prior contract to convey, a later contract with third parties does not defeat the first buyer’s right to specific performance.

## Conclusion

The court enforced the signed OTP as a binding real estate sales contract and held the seller waived the stated deadline for executing a formal purchase and sale agreement through post-deadline negotiations, entitling the buyer to specific performance despite the seller’s later deal with subsequent purchasers.


McCarthy v. Tobin, 429 Mass. 84, 706 N.E.2d 629 (Mass. 1999)