A Colorado buyer submits an offer using the CREC Contract to Buy and Sell Real Estate. The seller signs and returns the contract with one handwritten change initialed only by the seller — the closing date was moved from March 15 to March 22. The buyer's broker receives the signed contract and the buyer begins scheduling movers for March 22. Has a binding contract been formed?
Correct Answer
C) No, because the seller's handwritten modification constitutes a counteroffer that the buyer has not accepted in writing
When a seller signs a contract but makes any modification — even a seemingly minor one such as changing the closing date — that modification constitutes a counteroffer, not an acceptance. A counteroffer rejects the original offer and presents new terms. The buyer must accept the modified terms in writing for a binding contract to exist. The buyer's conduct (scheduling movers) does not constitute written acceptance under Colorado's Statute of Frauds.
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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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