A seller using the C.A.R. RPA receives a Multiple Counter Offer (SMCO) and signs it, returning it to one buyer. Before that buyer signs and delivers the accepted SMCO back to the seller, a second buyer submits a full-price offer. Which statement MOST accurately describes the seller's legal position?
Correct Answer
B) The seller may accept the second offer, because no contract forms until the seller re-signs the returned SMCO and delivers it to the first buyer
A multiple counter offer is a counter offer, not an acceptance, and the C.A.R. form says so on its face: it binds nobody unless the seller signs it, the buyer signs it, the seller then signs again on the final acceptance line, and a copy carrying all of those signatures is delivered to the buyer. Signing and returning the form completes only the middle step and leaves the seller free to sign or not. Because the seller has not signed the final acceptance and nothing has been delivered back, there is no contract, so the seller may take the second buyer's full-price offer. Withdrawing the multiple counter offer in writing is good practice for keeping the file straight, but it is not what determines whether the seller is bound.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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