A seller receives two offers on the same day: Offer A for $500,000 with no conditions, and Offer B for $520,000 with a home inspection condition. The seller signs Offer A. What is the legal status of Offer B?

Q: What is the correct answer to: A seller receives two offers on the same day: Offer A for $500,000 with no conditions, and Offer B for $520,000 with a home inspection condition. The seller signs Offer A. What is the legal status of Offer B?

The correct answer is Offer B is automatically rejected when Offer A is accepted. Option B is correct because acceptance of an offer creates a binding contract, and since a seller cannot sell the same property to multiple buyers, accepting Offer A automatically constitutes rejection of Offer B. This follows the fundamental contract law principle that acceptance of one offer terminates all other pending offers for the same subject matter. Under Canadian real estate law and provincial legislation like TRESA, RESA, and RECA regulations, this automatic rejection protects the integrity of property transactions and prevents conflicting contractual obligations.

Q: What background knowledge is needed for this Contracts & Agreements question?

In Canadian real estate, offers are governed by contract law principles and provincial regulations. An offer becomes a binding contract upon acceptance, creating legal obligations for both parties. The principle of exclusive property ownership means one property cannot be sold to multiple buyers simultaneously. Provincial real estate acts (TRESA in Ontario, RESA in Alberta, etc.) reinforce these contract principles. Real estate professionals must understand that acceptance is final and creates immediate legal consequences, including the automatic rejection of competing offers. This protects market integrity and prevents fraudulent multiple sales of the same property.

Q: What is a good way to remember the answer to this Contracts & Agreements question?

Think of property like a parking spot - only one car can occupy it at a time. When the seller 'parks' their acceptance with one buyer, all other buyers are automatically 'blocked out' and must find another spot. The acceptance key only fits one contract lock. When you see multiple offer questions, immediately think 'one property, one contract.' Ask yourself: 'Can the same property be sold to multiple buyers?' The answer is always no, so accepting one offer must reject all others.

Q: What exam tip applies to this Contracts & Agreements question?

Look for the word 'accepts' or 'signs' in multiple offer scenarios. Once you see acceptance language, immediately eliminate any options suggesting other offers remain valid or create additional contracts.

Q: How does this Contracts & Agreements concept apply in real world practice?

A listing agent receives three offers on a Friday evening. The seller reviews all offers over the weekend and decides to accept the middle-priced offer due to its clean terms and quick closing. The agent must immediately notify the other two buyers that their offers have been rejected, even though they haven't expired. The accepted offer creates a binding contract, and the seller cannot legally accept any other offers for the same property. This protects all parties and ensures clear property ownership transfer.

Question

Contracts & AgreementsAgreement Of Purchase And SaleMEDIUM

A seller receives two offers on the same day: Offer A for $500,000 with no conditions, and Offer B for $520,000 with a home inspection condition. The seller signs Offer A. What is the legal status of Offer B?

Answer Options

A

Offer B remains valid until its expiry date

B

Offer B is automatically rejected when Offer A is accepted

C

Offer B becomes a backup offer with legal priority

D

Both offers create valid contracts requiring dual performance