exchange of contracts

In property transactions, the 'exchange of contracts' is a critical step that legally binds the buyer and seller to the sale.

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Definition

(formal, legal)The stage in a property sale where the buyer and seller swap signed agreements, making the transaction legally binding.

Once the exchange of contracts occurs, neither party can back out without facing penalties.
The exchange of contracts is a pivotal moment in the home-buying process.

(formal, legal)The legal process in property transactions where signed documents are exchanged, committing both parties to the sale terms.

The exchange of contracts ensures that the sale of the property is legally enforceable.
During the exchange of contracts, a deposit is typically paid by the buyer.

Terms that have similar or relatively close meanings to "exchange of contracts":