A seller lists a home for $350,000. A buyer responds with a written offer of $330,000 with specific contingencies. The seller signs a counter-offer at $340,000 with modified contingencies and delivers it to the buyer. The buyer signs the counter-offer accepting every term as written and returns it. At the moment the buyer's signature is delivered, both parties hold an identical written set of terms to which each has signed assent. Before that signature, the parties had only proposals and counter-proposals. What contract-formation element was achieved by the buyer's signed return of the counter-offer?
Correct Answer
D) Mutual assent
Up until the buyer's signed return, the parties had only an unaccepted proposal and a counter-proposal. The buyer's signature on the seller's exact terms produced an identical commitment by both sides — the formation element captured by mutual assent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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