Under Michigan law, a purchase agreement for residential real estate is considered legally binding when which of the following occurs?
Correct Answer
D) All parties have signed the agreement and the signed acceptance has been communicated to the offeror
Under Michigan contract law, a purchase agreement becomes binding when there is a meeting of the minds — meaning all parties have signed and the acceptance has been communicated back to the offeror. Signature alone is insufficient; communication of acceptance is required to form a binding contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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