A buyer in Honolulu submits a written offer to purchase a condominium. The seller's agent receives the offer on Tuesday and presents it to the seller. The seller signs the acceptance on Wednesday morning. Later that Wednesday afternoon, before the seller's agent can contact the buyer's agent, the buyer sends a written revocation of the offer. Under Hawaii contract law, is there a binding contract?
Correct Answer
C) No, because the buyer's revocation was received before the seller communicated acceptance to the buyer
Under Hawaii contract law, acceptance must be communicated to the offeror before a binding contract is formed. The seller's signature alone — without communication to the buyer — is insufficient. Because the buyer sent a valid revocation before the seller's acceptance was communicated to the buyer's side, the revocation is effective and no binding contract was formed. The buyer retains the right to revoke any time before receiving notice of acceptance.
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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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