Does an Offer to Buy a BC Business Have to Be in Writing?

You have found a business to buy or sell, and the deal includes more than equipment and customers. The business may own its building, or it may operate from leased premises. You may be about to sign an offer or a letter of intent, or to hand over a deposit.

People often assume that nothing is binding until the formal purchase agreement is signed. When land is involved, British Columbia law is more nuanced than that. This article explains the main rule, how deposits fit in, and what to check before you commit.

This article covers the law of British Columbia.

The rule in section 59(3) of the Law and Equity Act

Under section 59(3) of the Law and Equity Act, a contract respecting land, or a disposition of land, is not enforceable unless one of three things is present. This rule is relevant if the business sale includes land or a lease. How it applies to a particular lease depends on the document and the facts, so it is worth confirming with a lawyer.

• A signed writing.
• An act or acquiescence by the party who is being held to the contract.
• Reasonable reliance that makes enforcement necessary to avoid unfairness.

So a signed document is only one route. A person can sometimes be held to a land deal through their conduct, even without a fully signed agreement. Whether that applies to your situation depends on the facts.

How a deposit or part payment can matter

Section 59(4) says that paying or accepting a deposit or part payment counts as the kind of act described above. In practice, handing over a deposit, or accepting one, can have legal weight before the formal agreement is finished.

This is why a deposit should not be treated as a casual gesture of good faith. Before money changes hands, make sure the paperwork says what the deposit is for and what happens to it if the deal does not go ahead.

If a deposit is at risk of being lost

Section 24 of the Law and Equity Act allows a court to relieve against all penalties and forfeitures, on terms it sees fit, including costs and compensation. A buyer or seller facing forfeiture of a deposit may therefore ask a British Columbia court for relief.

The Act has no dedicated deposit rules. Whether relief is realistic depends on the contract wording and the circumstances, so it is not something to count on.

Letters of intent and early documents

Many business deals begin with a letter of intent. These often contain clauses about exclusivity, confidentiality and who pays costs. Whether any of those clauses bind you depends on contract-law principles and court decisions, and a lawyer needs to read the exact wording to say.

Whether a particular letter of intent binds you depends on its exact wording and the facts, so it is worth confirming with a lawyer before you sign. Equally, do not assume it is binding. Have it reviewed before you sign.

What to do next

If the business owns land, a title search shows what is registered against it. A Land Title Office title search under Land Title Act s.377 costs $11.06 as at April 1, 2026, and searches through an LTSA account carry an electronic transaction fee of $3.55 ($2.20 for prepaid accounts), plus GST. A regular search may miss a builders' lien submitted for registration the same day but not yet registered, so lenders and buyers' lawyers often order a separate after-3:00 p.m. search. Title searches cover land only, not equipment or inventory.

• Do not pay or accept a deposit until you know what the document says about it.
• Ask a lawyer to review any offer or letter of intent before you sign.
• Confirm whether land or a lease is part of the deal.
• Order a title search if the business owns land.
• Keep copies of every message, draft and payment.

Frequently asked questions