A seller in Boulder receives an offer for $750,000 and responds by signing a counteroffer at $775,000 using the CREC-approved Counterproposal form. The buyer then verbally tells the listing broker they accept the $775,000 price. What is the legal status of the transaction at this point?
Correct Answer
D) No binding contract exists because the buyer has not signed and returned the counteroffer in writing
A counteroffer constitutes a rejection of the original offer and a new offer by the seller. For a binding contract to exist, the buyer must accept the counteroffer in writing and communicate that acceptance to the seller. A verbal acceptance does not satisfy Colorado's Statute of Frauds (C.R.S. § 38-10-108), which requires real estate contracts to be in writing.
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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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