An Oregon buyer submits an offer to purchase a Corvallis property for $310,000, with the offer expiring at noon on Wednesday. On Tuesday evening, the seller issues a counteroffer at $325,000, giving the buyer until noon on Thursday to respond. On Wednesday morning, the buyer decides to accept the original terms of $310,000 and notifies the seller's principal broker in writing. Which of the following is correct?
Correct Answer
D) No contract is formed because the buyer's attempt to accept the original offer is ineffective after a counteroffer was issued.
Under Oregon contract law, a counteroffer terminates the original offer. Once the seller issued a counteroffer at $325,000, the buyer's original offer of $310,000 was legally extinguished. The buyer cannot revive or accept the original offer after it has been terminated by a counteroffer. The buyer's only options are to accept the seller's counteroffer at $325,000, reject it, or issue a new counteroffer. The buyer's attempt to 'accept' the already-terminated $310,000 offer has no legal effect.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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