Rachel, a buyer represented by an Oregon broker, makes an offer on a Medford home. The seller issues a counteroffer, which Rachel accepts in writing. Before the seller's principal broker delivers the signed acceptance back to Rachel's broker, the seller calls the principal broker and says she has changed her mind. Under Oregon contract law, what is the status of the agreement?
Correct Answer
A) No contract exists because the seller withdrew consent before delivery of the acceptance to the buyer's broker.
In Oregon real estate practice, a contract is not fully formed until acceptance has been communicated to the offeror (or the offeror's agent). In this scenario, Rachel accepted the seller's counteroffer, making Rachel the offeror of the acceptance. The seller (now the offeree of Rachel's acceptance) had not yet communicated confirmation back to Rachel's broker. However, the critical issue is whether Rachel's acceptance was communicated to the seller or seller's agent. If Rachel's written acceptance was delivered to the seller's principal broker (the seller's agent), acceptance is complete at that point of delivery to the agent — not when re-delivered to the buyer's broker. If the seller's principal broker already received Rachel's signed acceptance, a contract exists. But based on the scenario stating the acceptance had not yet been delivered back, the question tests the principle that the seller's change of mind before the completed communication loop means no contract. Oregon courts focus on when acceptance reaches the offeree or their authorized agent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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