Sarah makes a written offer to purchase a home in St. Louis for $285,000. The seller counters at $295,000 with different closing terms. Before Sarah can respond, the seller calls her agent and says he accepts her original offer after all. Under Missouri contract law, which statement best describes this situation?
Correct Answer
A) No binding contract exists because the counteroffer terminated Sarah's original offer
Under Missouri contract law, a counteroffer operates as a rejection of the original offer and simultaneously creates a new offer. Once the seller issued a counteroffer at $295,000, Sarah's original offer was legally terminated. The seller cannot later 'accept' an offer that no longer exists. For a binding contract to form, Sarah would need to accept the seller's counteroffer or submit a new offer.
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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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