A New Hampshire listing agent is working with a seller in Portsmouth. The seller receives two offers simultaneously: Offer A for $450,000 with no contingencies, and Offer B for $460,000 contingent on the sale of the buyer's current home. The seller signs Offer A and instructs the listing agent to notify the Offer A buyer. Before the Offer A buyer is notified, the seller calls the listing agent and says she has changed her mind and wants to accept Offer B instead. Which of the following best describes the situation?
Correct Answer
A) The seller may switch to Offer B because no contract exists until the Offer A buyer is notified
Under New Hampshire contract law, a binding contract is not formed until the offeror (buyer) receives notice of the seller's acceptance. Because the Offer A buyer has not yet been notified of the seller's acceptance, no binding contract exists. The seller retains the right to withdraw her acceptance and redirect to Offer B before that notification occurs. This is a critical distinction: the seller's signature is necessary but not sufficient — communication to the buyer is also required.
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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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