Under Hawaii contract law, when does an offer to purchase real property become a binding contract?
Correct Answer
B) When the seller signs the offer and the buyer is notified of the seller's acceptance
Under Hawaii contract law, consistent with general contract principles applied in Hawaii courts, a binding contract is formed when the offeror (buyer) receives notification of the offeree's (seller's) acceptance. Mere signing by the seller without communication of that acceptance to the buyer does not create a binding contract. Both execution and notification of acceptance are required.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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