Key Takeaways
- Indiana real estate contracts must meet standard contract requirements plus state-specific provisions
- Earnest money must be deposited into a trust account promptly upon acceptance
- Indiana contracts typically include contingencies for financing, inspection, and appraisal
- The Statute of Frauds requires all real estate contracts to be in writing to be enforceable
- Time is of the essence clauses make all deadlines strictly enforceable
Last updated: January 2026
Indiana Purchase Contracts and Agreements
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Standard Contract Requirements
For a valid Indiana real estate contract:
| Requirement | Description |
|---|---|
| Competent Parties | Legal age (18+) and mental capacity |
| Offer and Acceptance | Meeting of the minds |
| Legal Purpose | Transaction must be lawful |
| Consideration | Something of value exchanged |
| Written Form | Statute of Frauds requirement |
| Legal Description | Property must be identifiable |
Indiana Statute of Frauds
Indiana's Statute of Frauds (IC 32-21-1) requires real estate contracts to be:
- In writing
- Signed by the party to be charged
- Contains essential terms
Exam Tip: Verbal real estate contracts are NOT enforceable in Indiana due to the Statute of Frauds.
Contract Formation
Offer and Acceptance
| Stage | Description |
|---|---|
| Offer | Buyer proposes terms |
| Counter-Offer | Rejection and new proposal |
| Acceptance | Unconditional agreement to all terms |
| Binding Contract | When acceptance is communicated |
When Contract Becomes Binding
An Indiana purchase contract becomes binding when:
- All parties have signed
- Acceptance is communicated
- Delivery of acceptance completed
Earnest Money Requirements
Deposit Timing
Indiana requires earnest money to be deposited into a trust account promptly upon contract acceptance.
| Requirement | Detail |
|---|---|
| Deposit Deadline | Promptly after acceptance (typically within 3 business days) |
| Account Type | Broker's trust account |
| Amount | Negotiable between parties |
| Purpose | Shows buyer's good faith |
Handling Earnest Money
| Action | Rule |
|---|---|
| Depositing | Promptly after acceptance |
| Holding | In trust account until closing or termination |
| Disbursement | Only per contract terms or agreement |
| Disputes | Hold until resolved or interpleader filed |
Standard Contract Provisions
Time is of the Essence
Most Indiana contracts include this clause:
- All deadlines are strictly enforceable
- Missing a deadline may constitute breach
- Extensions must be in writing
Common Contingencies
| Contingency | Purpose |
|---|---|
| Financing | Buyer must obtain loan approval |
| Inspection | Buyer may inspect property |
| Appraisal | Property must appraise at purchase price |
| Sale of Buyer's Property | Buyer must sell existing home |
| Attorney Review | Legal review of contract |
Inspection Contingency
The inspection contingency allows:
- Professional inspection of property
- Negotiation of repairs
- Termination for significant defects
- Credit in lieu of repairs
Financing Contingency
Protects buyer if:
- Loan application denied
- Interest rate exceeds specified amount
- Appraisal below purchase price
Contract Amendments
Changes to the contract require:
| Change Type | Method |
|---|---|
| Before acceptance | Counter-offer |
| After binding contract | Written amendment |
| Price changes | Amendment signed by all |
| Deadline extensions | Amendment signed by all |
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Test Your Knowledge
When must earnest money be deposited in Indiana?
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Test Your Knowledge
What does "time is of the essence" mean in an Indiana real estate contract?
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