A Utah seller receives two offers simultaneously. The listing agent presents both offers to the seller. The seller counters one offer and rejects the other. When does the counter offer become a binding contract?
Correct Answer
C) When the buyer accepts and the seller (or seller's agent) receives notice of the buyer's acceptance
Under Utah contract law and the REPC, a counter offer is a new offer. It becomes a binding contract only when the buyer accepts and the acceptance is communicated back to the seller or seller's agent. Mere signing by either party alone does not create a binding agreement.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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