I know this will not be a complete explanation but it can serve as an overview.

Contracts are the basis of buying and selling real estate. A contract is a legal document that affects the buyer, seller, brokers, and every other person involved in a real estate transaction.  The contract in a real estate transaction can prevent problems or cause disputes. If the basic contract law principles are applied, each transaction will proceed more smoothly, with fewer disputes and less liability for the parties involved.

For a valid contract to exist there must be an offer, acceptance, consideration and sufficient specificity so that the obligations involved can be ascertained.  Real property contracts must meet certain other requirements and usually contain numerous other important provisions relating to the transaction. 

A contract for the sale of real property must be in writing and signed by the party to be charged to be enforcable.
Any modifications must also be in writing and signed.
Both husband and wife must sign a real estate contract for the community property to be obligated. If this is
impossible, one spouse may sign the documents on behalf of the other pursuant to a power of attorney.
An "offer" is an expression of willingness to enter into an agreement which creates a power of acceptance premitting it to transform into a contract.
"Acceptance" of an offer must be in the exact terms as the offer, and any attempt to change the terms becomes a
counteroffer, which rejects the offer.
"Consideration" may be earnest money or "$10 and other valuable consideration" or may involve a promise for a promise.
"Sufficient Specificity" must be clear and contain all of the material terms of the transaction.  All critical provisions
must be specified and agreed upon.
"Parties" identity of the buyer and seller (must be 18 or older) should be set forth with specificity.  All parties must be competent.
"Property Description" must be identified so that it can be ascertained. Preferably by legal description.