A seller in Prince George's County receives two offers simultaneously on her single-family home. She accepts Offer A from Buyer Chen and signs the contract. Two days later, still within the due diligence period, she realizes she prefers Offer B from Buyer Davis, which was for a higher price. She asks her listing agent whether she can void the contract with Buyer Chen and accept Offer B instead. What should the listing agent advise?
Correct Answer
C) She cannot void the binding contract with Buyer Chen without legal grounds or mutual agreement
Once a binding contract is formed — offer accepted, signed, and acceptance communicated — neither party can unilaterally void it without legal grounds (such as a contingency, mutual rescission, or breach by the other party). The due diligence period provides the buyer, not the seller, with the right to investigate the property. The seller has no unilateral right to cancel simply because a better offer has arrived. Doing so could expose the seller to a breach of contract claim by Buyer Chen.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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