A preliminary contract is not necessary. A buyer and a seller may proceed directly with the final deed without entering into such a preliminary contract.
If, however, a preliminary contract is entered into, it is binding between the parties. The effects of the preliminary contract differ depending on whether the sum of money paid by the purchaser to the vendor on the preliminary agreement is paid on account of the purchase price or whether it is paid as earnest.
If the said amount of money is paid on account of the purchase price, according to article 1357 of the Civil Code, and one of the parties fails to appear on the final deed of sale, it is within the rights of the other party to request specific performance of this obligation and therefore ask the Court to order the sale to be carried out.
If on the other hand, the amount of money is paid in earnest, according to article 1359 of the Civil Code, Chapter 16 of the Laws of Malta, each of the parties shall be at liberty to recede from the contract: the party giving the earnest forfeiting such earnest, and the party receiving the earnest returning double the amount thereof.