A buyer's agent in Fayetteville presents an offer to purchase on behalf of her client on Monday morning. The seller's agent calls the buyer's agent on Tuesday afternoon and says, 'The seller has decided to accept your client's offer.' However, the buyer had already withdrawn the offer in writing on Tuesday morning. Under Arkansas contract law, what is the status of this transaction?
Correct Answer
D) No contract exists because the offer was validly revoked before acceptance was communicated
Under Arkansas contract law, an offeror may revoke an offer at any time before acceptance is communicated, provided the revocation is communicated to the offeree. Since the buyer withdrew the offer in writing on Tuesday morning—before the seller's acceptance was communicated on Tuesday afternoon—the offer was no longer open for acceptance. No binding contract was formed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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.
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