A seller in Auburn, Alabama signs and accepts a buyer's written offer on Monday. On Tuesday, before the buyer's agent has communicated the acceptance to the buyer, the seller receives a significantly higher offer from a second buyer. The seller calls the listing broker and says she wants to 'un-accept' the first offer and accept the second. Under Alabama law, which of the following most accurately describes the seller's legal position?
Correct Answer
D) The seller's acceptance became binding when the listing broker received the signed acceptance on behalf of the buyer
This question involves the critical distinction between the seller's ability to revoke acceptance versus the buyer's ability to revoke an offer. When a seller accepts an offer, the acceptance is communicated to the buyer through the buyer's authorized agent — in this case, the listing broker who is acting in a cooperative transaction context. However, the key Alabama principle is that the listing broker, when transmitting acceptance, acts as the conduit for communication. More precisely, under the mailbox rule and agency principles applicable in Alabama, acceptance is effective when communicated to the offeror's agent. The listing broker received the signed acceptance on behalf of the buyer's side of the transaction, making the contract binding at that point. The seller cannot unilaterally revoke a communicated acceptance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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