A buyer in Colorado makes an offer on a home and includes an escalation clause stating the buyer will beat any competing offer by $5,000 up to a maximum of $600,000. The seller receives a competing offer for $580,000. The listing broker wants to know how to handle the escalation clause properly under Colorado practice. Which of the following is the most accurate statement?
Correct Answer
C) The seller should use the CREC Counterproposal form to confirm the escalated price and obtain the buyer's written agreement to the final terms
While escalation clauses are used in Colorado practice, the escalated price must be memorialized in a written, signed agreement to be enforceable. The best practice is for the seller to use the CREC Counterproposal form to confirm the escalated purchase price and obtain the buyer's written acceptance of the final terms. This ensures compliance with the Statute of Frauds and creates a clear, binding contract at the escalated price.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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