A buyer submits a written offer on a property in Conway, Arkansas, with a deadline stating 'this offer expires at 5:00 PM on Wednesday.' The seller's agent calls the buyer's agent at 4:45 PM Wednesday and says the seller wants to counter at a higher price. At 5:30 PM Wednesday, the seller decides to accept the original offer terms and signs the agreement. Under Arkansas contract law, what is the legal effect of the seller's 5:30 PM signature?
Correct Answer
C) The seller's signature constitutes a new offer that the buyer may accept or reject
When an offer contains a specific expiration deadline, the offer terminates automatically at that time. The seller's phone call at 4:45 PM constituted a counteroffer (not an acceptance), which further terminated the original offer. When the seller signed the original terms at 5:30 PM—after the deadline and after making a counteroffer—the seller was in effect making a new offer to the buyer on the original terms. The buyer is free to accept, reject, or counter this new offer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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