Under Minnesota law, a real estate purchase agreement becomes a binding contract when which of the following occurs?
Correct Answer
B) The seller signs the acceptance and communicates it to the buyer or buyer's agent
Under Minnesota contract law (consistent with Minn. Stat. Ch. 82 licensing obligations and general contract principles applied in MN real estate practice), a purchase agreement becomes binding when the seller's acceptance is communicated back to the offeror (buyer or buyer's agent). Acceptance is not effective until it is actually communicated — signature alone by the seller is insufficient without communication of that acceptance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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