A seller receives two offers simultaneously: Offer A for $500,000 with no conditions, and Offer B for $520,000 with a financing condition. The seller signs and returns Offer A. What is the legal status of Offer B?

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

The correct answer is The seller must formally reject Offer B in writing. Option D is correct because under Canadian contract law and real estate regulations, offers do not automatically become void when another offer is accepted. The seller has a legal and ethical obligation to formally communicate rejection of competing offers in writing. This requirement protects against potential claims of multiple contracts and ensures clear, documented communication. Provincial real estate legislation emphasizes the importance of proper offer management and written communication to maintain transparency and avoid legal disputes.

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

In Canadian real estate, offer management is governed by contract law principles and provincial regulations. An offer creates a legal obligation that remains valid until acceptance, rejection, withdrawal, or expiry. When sellers receive multiple offers, accepting one does not automatically void others - this prevents confusion and potential legal issues. Provincial real estate acts and regulations require clear, written communication in all transactions. The duty to formally reject competing offers protects both sellers from claims of multiple contracts and offerors from uncertainty about their offer status.

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

Remember WRITE: When Receiving Identical Timing Entries (multiple offers), you must Write Rejection In Timely Execution. Just like breaking up with someone - you can't just start dating someone else and hope the first person gets the hint. You must formally communicate the rejection. When you see questions about multiple offers and what happens to non-accepted offers, think WRITE - the seller must Write a Rejection In Timely Execution. This reminds you that formal written rejection is required, not automatic voiding.

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

Look for keywords like 'simultaneously,' 'multiple offers,' or 'competing offers.' Remember that acceptance of one offer never automatically voids others - formal rejection is always required in writing.

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

A listing agent receives three offers on Friday evening for a popular property. The seller accepts the highest offer Saturday morning. The agent must immediately prepare formal rejection letters for the two unsuccessful offerors, clearly stating their offers have been rejected. Simply accepting another offer and hoping the unsuccessful offerors 'figure it out' could lead to legal complications, especially if those offerors believe their offers are still under consideration and make decisions based on that assumption.

Question

Contracts & AgreementsAgreement_of_purchase_and_saleMEDIUM

A seller receives two offers simultaneously: Offer A for $500,000 with no conditions, and Offer B for $520,000 with a financing condition. The seller signs and returns Offer A. What is the legal status of Offer B?

Answer Options

A

Offer B remains valid until its expiry time

B

Offer B is automatically rejected when Offer A is accepted

C

Offer B becomes a backup offer with priority status

D

The seller must formally reject Offer B in writing