A Missouri buyer submits an offer on a St. Charles property and includes the following clause: 'This offer shall remain open and irrevocable for 72 hours from the date of submission.' No separate consideration is paid to the seller for this irrevocability provision. Twenty-four hours later, the buyer attempts to revoke the offer. The seller, relying on the 'irrevocable' language, refuses to acknowledge the revocation and signs the acceptance 48 hours after submission. Under Missouri law, which statement BEST describes the outcome?
Correct Answer
B) No binding contract was formed because the buyer effectively revoked the offer before acceptance was communicated
Under Missouri contract law, an offer is generally revocable at any time before acceptance is communicated, even if the offer states it will remain open for a specified period. An 'irrevocable' offer provision is only enforceable as an option contract if the offeree (seller) provides separate consideration to keep the offer open. Because no separate consideration was paid, the irrevocability clause is unenforceable. The buyer's revocation at 24 hours was legally effective, and the seller's acceptance at 48 hours came after a valid revocation — therefore, no binding contract was formed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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.
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