A buyer in Hawaii submits an offer to purchase a fee simple residential property. The seller's agent, acting without the seller's knowledge or authorization, signs the seller's name on the acceptance and immediately notifies the buyer's agent. The seller later discovers this and repudiates the acceptance. Under Hawaii law, which of the following best describes the legal result?
Correct Answer
A) No binding contract exists because the seller's agent lacked actual or apparent authority to accept the offer on the seller's behalf
Under Hawaii agency law and general contract principles, a listing agent does not have actual authority to accept a purchase offer on behalf of the seller — the agent's role is to present offers and communicate acceptances, not to make binding decisions. Unless the seller specifically authorized the agent to accept offers (which did not occur here), the agent lacked both actual and apparent authority to sign the acceptance. Therefore, the seller's repudiation is valid and no binding contract was formed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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