Buyer Lisa submits a written offer to purchase a property in Beaufort, South Carolina, and includes an earnest money deposit of $5,000. The offer states it is irrevocable until 6:00 PM on Friday. On Thursday afternoon, Lisa calls her agent and says she wants to withdraw the offer. Her agent informs the seller's agent of the withdrawal. The seller signs and returns the accepted offer to Lisa's agent at 4:00 PM on Friday — before the stated deadline. Under South Carolina law, which outcome is most likely correct?
Correct Answer
B) No binding contract was formed because Lisa effectively revoked her offer on Thursday by communicating her intent to withdraw.
Under South Carolina contract law, an irrevocability clause in an offer — stating the offer cannot be withdrawn until a certain time — is generally unenforceable unless it is supported by separate consideration (i.e., an option contract). A standard purchase offer with an irrevocability clause but no separate consideration paid by the seller to keep the offer open is still revocable by the buyer at any time before acceptance. Because Lisa communicated her revocation on Thursday — before the seller accepted on Friday — the offer was effectively withdrawn and no binding contract was formed. The irrevocability language alone, without consideration, does not bind Lisa.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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