During a real estate transaction in Evansville, Indiana, a buyer's broker receives a signed counteroffer from the seller at 2:00 PM. The buyer's broker calls the buyer at 2:15 PM and verbally describes the counteroffer terms. The buyer verbally says 'I accept' over the phone at 2:30 PM. The buyer's broker does not obtain a written signature from the buyer until the next morning. Under Indiana law, when was the contract formed, if at all?
Correct Answer
A) The following morning, when the buyer signed the written acceptance, because Indiana requires written acceptance of real estate contracts to be enforceable
Under Indiana law and the Statute of Frauds (applicable in Indiana to real estate contracts), a contract for the sale of real property must be in writing and signed by the party to be charged to be enforceable. A verbal acceptance of a real estate counteroffer, while it may indicate intent, does not satisfy the Statute of Frauds requirement. The enforceable contract was not formed until the buyer provided a written signed acceptance the following morning. Indiana brokers must ensure written signatures are obtained to create an enforceable real estate purchase contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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