A buyer submits a written offer on a Jefferson City property. The listing broker, who is also the seller's designated agent under Missouri's designated agency framework, receives the offer on Monday. Without consulting the seller, the broker signs 'accepted' on the offer form and notifies the buyer's agent that the property is under contract. The seller later learns of this and claims no contract exists because the broker had no authority to accept on the seller's behalf. Under Missouri law, which statement BEST describes the legal status of this purported contract?
Correct Answer
B) A binding contract may exist if the seller's listing agreement expressly granted the broker authority to accept offers
Under Missouri law, a listing broker's authority is defined by the listing agreement. A broker generally has the authority to market the property, present offers, and negotiate — but does NOT have implied authority to accept an offer on the seller's behalf unless the listing agreement expressly grants that authority (a 'power of attorney' or specific authorization clause). If the listing agreement expressly granted the broker authority to accept offers, a binding contract could exist. Without such express authority, the broker's acceptance would be unauthorized and the seller would not be bound. The correct answer acknowledges this conditional analysis based on the listing agreement's terms.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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