Marcus submits a written offer to purchase a home in Huntsville, Alabama for $285,000 on Monday morning. On Tuesday afternoon, the seller signs the offer without any changes and instructs her agent to call Marcus. Before the agent can reach Marcus, Marcus calls and withdraws his offer. Which statement correctly describes the legal status of this situation under Alabama law?
Correct Answer
C) No binding contract was formed because Marcus withdrew before receiving notice of acceptance
Under Alabama contract law, an offeror may revoke an offer at any time before acceptance is communicated to them. Because Marcus withdrew his offer before the agent notified him of the seller's acceptance, no binding contract was formed. The seller's act of signing alone does not complete acceptance — communication to the offeror is required.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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