The purchase offer is binding: what buyers must know before signing

Under Austrian law a contract comes into being through matching declarations of intent, that is through offer and acceptance. The purchase offer is the offer of the buyer. It is binding if it lays down the essential content of the future contract, in particular the property and the purchase price, and shows the intention to be bound. These basic rules of contract conclusion are found in the provisions on offer and acceptance in the Austrian Civil Code.

With the signature the buyer makes a binding declaration. He can no longer unilaterally withdraw it once it has reached the seller. A revocation only works if it reaches the seller before or at the latest at the same time as the offer. From receipt onwards the buyer is bound by his word for the duration of the acceptance period.

If the seller accepts the offer within the period, the purchase contract is concluded. A separate, fully drafted purchase contract is not strictly necessary for the contract to come into being. The fully drafted contract then only serves the precise settlement and the registration in the land register. What matters in this contract is shown in our post on how to review a property purchase contract before signing.

The acceptance period determines how long the buyer remains bound by his offer. If a period is named in the offer, that period applies. If the seller accepts only after expiry, no contract comes into being, unless the buyer lets the late acceptance count against him. A late acceptance counts in law as a new offer.

If the offer contains no express period, the buyer is nonetheless bound for a reasonable time. How long this binding lasts depends on the circumstances of the individual case, for example the type of transaction and the usual time for reflection. For this reason alone every offer should contain a clear acceptance period so that both sides know where they stand.

For the binding what matters is receipt. The offer becomes effective as soon as it reaches the seller, and the acceptance becomes effective as soon as it reaches the buyer. Whoever cleanly documents the timing of offer, period and acceptance can later prove whether and when the contract came into being.

In practice several terms appear around the conclusion of a contract that have different legal consequences. The purchase offer is the binding offer of one party. If it is accepted, the purchase contract is concluded. The label as offer, purchase offer or purchase proposal changes nothing about the binding effect.

The written record of the main points is a written fixing of the main points of a transaction, that is above all the object and the price. If the parties agree on these main points and fix them in writing, the contract has already validly come into being, even if secondary points are still open. A signature meant as such a record can therefore already bind.

The preliminary contract is the obligation to conclude a main contract in the future. From it one party can demand performance, that is the conclusion of the main contract. The preliminary contract too therefore binds, even if in a different form than the immediately effective offer. Which type of contract is present in the specific case follows from the content of the declaration, not from its heading.

Whoever wants to break free after the contract has come into being without legal grounds risks consequences. The seller can insist on performance or demand damages. If forfeit money is agreed in the offer, withdrawal against payment of this amount may be permitted. Which exit routes exist is dealt with in our post on withdrawal from a property purchase contract.

The most important protection lies before signing. Clarify the financing before you bind yourself, or include a financing condition in the offer. How such a condition is drafted is explained in our post on the financing condition and the condition precedent.

In addition, check the property itself before you submit an offer. Which encumbrances and rights are registered in the land register you recognise with the encumbrances and land register check. This way you do not bind yourself to a purchase whose risks you do not yet know.