Sarah, an affiliate broker in Nashville, has just received a signed purchase offer from her buyer client for a property listed at $285,000. The seller has not yet responded. At this stage, what is the legal status of the document?
Correct Answer
A) An offer, because only the buyer has signed and the seller has not yet accepted
A purchase offer becomes a binding contract only upon acceptance by the offeree (the seller) and communication of that acceptance back to the offeror. Until the seller signs and communicates acceptance, the document is merely an offer. This is a foundational contract formation principle applied in all Tennessee real estate transactions under general contract law.
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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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