A buyer submits an offer on a Stillwater, Minnesota property. The seller makes a counteroffer changing the price. The buyer verbally tells the seller's agent, 'That works for me,' but never signs the counteroffer. The seller's agent tells the listing broker that the buyer accepted. The listing broker then calls the seller to say the deal is done. Later, the buyer refuses to proceed. The seller sues for breach of contract. Under Minnesota law, what is the MOST likely outcome?
Correct Answer
C) The buyer will prevail because Minnesota's Statute of Frauds requires real estate contracts to be in writing and signed by the party to be charged
Under Minnesota's Statute of Frauds (Minn. Stat. § 513.04), contracts for the sale of real estate must be in writing and signed by the party against whom enforcement is sought (the party to be charged). The buyer never signed the counteroffer or any written acceptance. A verbal acceptance, even if communicated through agents, does not satisfy the Statute of Frauds for a real estate contract in Minnesota. Therefore, the buyer cannot be held to the contract and will most likely prevail in the lawsuit.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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.
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