A buyer submits an offer on a property in Texarkana, Arkansas, and includes the following clause: 'This offer shall remain irrevocable for 72 hours from the time of delivery.' Forty-eight hours after delivery, the buyer attempts to withdraw the offer. The seller has not yet responded. Under Arkansas contract law, what is the legal effect of the buyer's attempted withdrawal?
Correct Answer
B) The withdrawal is effective because an offeror may revoke an offer at any time before acceptance, regardless of any stated irrevocability period
Under Arkansas contract law, an offeror retains the power to revoke an offer at any time before acceptance, even if the offer states it will remain open for a specified period. An irrevocability clause in an offer is generally unenforceable unless it is supported by separate consideration—making it an option contract. Because the buyer provided no separate consideration to keep the offer open, the 72-hour irrevocability clause is unenforceable, and the buyer's withdrawal at 48 hours is legally effective. This is a classic distinction between an offer with an irrevocability clause and a true option contract.
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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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