In a TREC contract the effective date is determined by the final date of acceptance by all parties. This date, when all parties have come to agreement and signed the contract, is when the contract becomes binding between the parties. To have final acceptance we must have four items:
- The final contract must be in writing;
- All buyers and sellers must sign the final contract, including the initialing of any handwritten changes to the initially drafted offer, if applicable;
- Acceptance must be unequivocal;
- The last party to accept must communicate acceptance back to the other party or the other party’s agent.
The effective date of the contract is the date when the last element (typically communicating acceptance to the other party) is made after the other three elements are satisfied. The final step of communication is very important to begin the timelines for performance under the contract.