Arras Contract — Spanish Property Glossary

An arras contract (contrato de arras) is a preliminary agreement between buyer and seller that reserves a property and establishes the terms of the future sale. The most common type is arras penitenciales, which allows either party to withdraw: if the buyer pulls out, they forfeit the deposit; if the seller pulls out, they must return double the deposit. The deposit is typically 10% of the purchase price, though this is negotiable. The arras contract specifies the agreed price, completion deadline, property details, and any conditions (such as obtaining a mortgage). It is a binding agreement with financial consequences for breach. The contract should be reviewed by your lawyer before signing. Less common types include arras confirmatorias (where withdrawal is not allowed and breach leads to damages claims) and arras penales (where a penalty is agreed for breach but the contract remains enforceable). The arras deposit is deducted from the final purchase price at completion. Always ensure the contract clearly states which type of arras applies, as the legal consequences differ significantly. A well-drafted arras contract protects both parties during the period between agreement and notary completion.