Definitions for "Exchange of contract"
the point when vendor and buyer swap documentation and start the settlement process.
This occurs when the vendor and buyer give each other the necessary legal documents (usually occurs via solicitor or conveyancer) and commence the settlement process.
Legal point of time when the vendor and purchaser swap legal documents and start inquiries with view to settlement
Keywords:  binds, sign, accompanied, loose, fails
When land is sold, the person selling (seller) and the buyer both sign identical copies of the contract and exchange them. The contract is then binding on both of them.
This formal document, when signed and accompanied by the specified deposit, binds the purchaser to complete the property transaction as per the conditions of the contract. If the purchaser fails to complete the transaction they are likely to loose the deposit which is usually 10% of the contract price. This is why it is preferable to have at least a conditional approval for finance before exchanging contracts.
The point that both parties are committed to the transaction. This is set at a time and date.