Gary and Linda are co-owners of a rental property in Montgomery, Alabama. A buyer submits a written purchase offer addressed to both Gary and Linda. Gary signs the acceptance, but Linda refuses to sign. The buyer insists a contract has been formed because one owner accepted. Which of the following correctly states the legal outcome under Alabama law?
Correct Answer
D) No binding contract exists because all co-owners must agree to sell jointly owned property
Under Alabama property law, when real property is co-owned, all owners must consent to and sign a contract for the sale of the entire property. Gary's signature alone does not bind Linda or create a contract for the whole property. Because the buyer's offer was for the entire property and Linda did not accept, no binding contract was formed. Co-ownership does not create implied authority for one owner to bind another.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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