A seller in Hot Springs accepts a buyer's offer by signing the purchase agreement on Friday evening. The seller's agent emails a scanned copy of the signed agreement to the buyer's agent at 9:00 PM Friday. The buyer's agent does not check email until Saturday morning. The buyer had submitted a higher backup offer to a different property on Saturday at 8:00 AM. Under Arkansas contract law, when was the contract with the original seller formed?
Correct Answer
C) Friday evening, when the seller's agent sent the email communicating acceptance
Under the mailbox rule as applied in Arkansas contract law, acceptance is effective when it is dispatched (sent) by an authorized means of communication, not when it is received or read. When the seller's agent emailed the signed acceptance at 9:00 PM Friday, acceptance was communicated at that moment. A binding contract was formed Friday evening, prior to the buyer's Saturday morning actions regarding the other property.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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