Sarah, an Indiana Broker working under a Managing Broker, prepares a purchase agreement for her buyer client. The agreement is signed by the buyer but the seller has not yet signed. At this point, the contract is best described as which of the following?
Correct Answer
D) An unilateral offer, because only one party has signed
When only one party has signed a purchase agreement, it constitutes a unilateral offer — a promise by the buyer to purchase under specified terms. Mutual assent (offer and acceptance by both parties) is required to form a binding bilateral contract. Until the seller signs and communicates acceptance, no contract exists under Indiana law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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