IV. Formal Sale and Purchase Agreement
Although a provisional sale and purchase agreement is a legally binding contract, it only contains basic terms and therefore the protection provisions for the contracting parties (especially the purchaser) are limited. A formal sale and purchase agreement should be drafted by a solicitor based on the provisional agreement. A formal agreement contains terms that are more detailed and is intended to replace the provisional agreement. In case the parties fail to sign the formal agreement (e.g. they cannot agree on all the terms of the formal agreement), they are still bound by the provisional agreement.