When I first moved to Puerto Vallarta and I came across a documented offer to buy real estate, as a Mexican lawyer I was intrigued to say the least. In all my years of legal practice in Mexico, I had never seen a document containing an Offer the way it is used here. At a first glance it seemed to me like a rough attempt to “tropicalize” a U.S. and Canadian legal instrument. This is because a documented “Offer to buy Real Estate”, is only used in Mexican cities where usually buyer and seller are foreign (such as Puerto Vallarta, Cancun or Cabo). In the rest of Mexico, the contract that is used when you are planning to buy or sell real estate is called a “Promissory Contract”, and this contract (unlike the Offer) is specifically regulated under Mexican Law.
So is an Offer to buy Real Estate, a binding contract under Mexican Law?
After I reading an Offer for the first time, I decided to study the document in more detail in order to determine if it was a valid and binding contract under Mexican Law and not just the product of what I like to call the “Conquistador Complex”. I concluded that even though it is an “atypical contract” in Mexico, the Offer does have the elements of a binding contract: there is consent of the parties (signature), there is a purpose (the commitment to buy and sell) and there is an agreed price. It is important that the offer includes, just like the “Promissory Contract”, a time limit to sign the final purchase deed (closing date). It is paramount that the wording in Spanish is clear and precise enough, otherwise the offer could lack legal validity. It is also advisable that the Offer is drafted and revised by someone with a certain knowledge of Mexican law so that it includes specific clauses such as early termination, penalties, escape clause, liabilities and enforcement.
But there is a catch…
Something that you must be aware of is that Xerox copies or PDF copies in Mexico have NO legal validity, so event if you have signed an offer and have a PDF copy, you should always get an original signed by the parties, otherwise in case there is a breach of contract, you will have a hard time trying to enforce the offer or trying to collect penalties.
So now you know that the “Offer to Purchase Real Estate” is legally binding contract in Mexico, but you still have to make sure that it contains certain elements, otherwise it can be declared null and void.
