A buyer's agent in New Orleans presents an offer on behalf of her client on Monday morning. The seller's agent calls back Monday afternoon to say the seller is 'very interested' but needs until Wednesday to decide. The buyer's agent relays this to her client, who says nothing in response. On Wednesday, the seller calls to accept the original offer. Under Louisiana Civil Code principles, is there a binding contract?
Correct Answer
D) No, because the offer may have been revoked by the buyer before Wednesday
Under Louisiana Civil Code Art. 1930, an offer that does not specify a time period for acceptance may be revoked at any time before acceptance. Since the buyer did not grant the seller an irrevocable option or set a specific deadline, the buyer retained the right to revoke the offer at any time before the seller's acceptance on Wednesday. Whether a binding contract exists depends on whether the buyer revoked before Wednesday. The correct answer identifies the operative legal issue: the offer was revocable, and revocation before acceptance would prevent contract formation.
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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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