A buyer submits a written offer on a home in Dothan, Alabama. The offer contains a clause stating: 'This offer is irrevocable for 72 hours from submission.' No separate consideration is paid by the buyer to keep the offer open. Twenty-four hours after submission, the buyer finds a better property and attempts to withdraw the offer. The seller, who has not yet responded, insists the offer cannot be withdrawn. Under Alabama law, which of the following is correct?
Correct Answer
B) The buyer may withdraw the offer because an irrevocability clause without separate consideration is unenforceable
Under Alabama contract law, an offer is generally freely revocable at any time before acceptance, regardless of a stated irrevocability period, unless the irrevocability promise is supported by separate consideration — making it an option contract. A bare promise to keep an offer open, without the buyer receiving something of value in exchange for that promise, is not enforceable as a contract in itself. Because no separate consideration was paid to the buyer for the irrevocability promise, the clause is unenforceable and the buyer may revoke at any time before acceptance is communicated. This is a classic trap: candidates assume a written irrevocability clause is self-enforcing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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