A seller receives two offers on the same day with identical terms except for closing dates. Under common law contract principles, what should the seller's agent advise?

Q: What is the correct answer to: A seller receives two offers on the same day with identical terms except for closing dates. Under common law contract principles, what should the seller's agent advise?

The correct answer is The seller can choose either offer as no binding contract exists until acceptance. Option C correctly states the fundamental contract law principle that no binding contract exists until acceptance occurs. Under common law, an offer is merely an invitation that can be accepted or rejected at the offeree's discretion. The seller has complete freedom to choose between competing offers based on their preferences, regardless of which offer arrived first. The timing of receipt creates no legal obligation or priority. This principle is consistently applied across Canadian jurisdictions and protects the seller's right to make the best decision for their circumstances.

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

Contract formation requires offer, acceptance, consideration, and intention to create legal relations. An offer is a proposal that, when accepted, creates a binding contract. Until acceptance occurs, the offeror can revoke the offer (subject to any irrevocability periods), and the offeree has no obligation to accept. In real estate, offers typically include irrevocability periods during which the offer cannot be withdrawn. Multiple offer situations are common in competitive markets. Provincial regulations may require specific disclosure procedures when multiple offers exist, but these don't affect the fundamental principle that sellers can choose among valid offers. The agent's duty is to present all offers and advise on the seller's options while following provincial disclosure requirements.

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

Remember 'CHOICE' - Contract formation requires acceptance, so sellers always have a CHOICE until they accept. Think of offers like restaurant menus - you can look at multiple menus (offers) but you're not obligated to order (accept) from the first one you see. You choose what appeals to you most. When you see questions about multiple offers or contract formation, remember CHOICE. Ask yourself: 'Has acceptance occurred?' If not, the seller retains full choice. This helps distinguish between receiving offers and being bound by them.

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

Look for keywords like 'binding contract' and 'acceptance' in contract questions. Remember that offers create opportunities, not obligations, for the recipient. Until acceptance occurs, sellers maintain complete freedom to choose.

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

A listing agent receives two offers on a Friday afternoon for a popular property. The first offer arrives at 2 PM with a 60-day closing, and the second arrives at 4 PM with a 30-day closing. The sellers prefer the quicker closing to align with their new home purchase. The agent correctly advises that they can accept either offer regardless of timing, and they choose the second offer with the 30-day closing. The agent ensures proper documentation and follows provincial multiple offer disclosure requirements while respecting the sellers' contractual freedom.

Question

Contracts & AgreementsContract Law FundamentalsABEASY

A seller receives two offers on the same day with identical terms except for closing dates. Under common law contract principles, what should the seller's agent advise?

Answer Options

A

Accept the first offer received to avoid legal complications

B

Accept both offers and let the buyers compete

C

The seller can choose either offer as no binding contract exists until acceptance

D

Split the difference and counter-offer both buyers