An Oregon seller accepts a buyer's offer and signs the purchase and sale agreement on Monday morning. The seller's broker calls the buyer's broker Monday afternoon to communicate the acceptance. The buyer's broker does not reach the buyer until Tuesday morning. When did the binding contract most likely become effective in Oregon?
Correct Answer
B) Monday afternoon, when the seller's broker communicated acceptance to the buyer's broker
In Oregon, a contract becomes binding upon communication of acceptance to the offeror or the offeror's authorized agent. When the seller's broker communicated the seller's signed acceptance to the buyer's broker on Monday afternoon, the buyer's broker—as the buyer's authorized agent—received that communication on the buyer's behalf. This is the moment the binding contract was formed, not when the buyer was personally notified.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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