Under Tennessee contract law, which of the following best describes the moment a binding real estate contract is formed between a buyer and seller?
Correct Answer
D) When the seller accepts the offer and that acceptance is communicated back to the buyer or buyer's agent
Under Tennessee contract law, a binding contract is formed at the moment of mutual assent — that is, when the seller's acceptance is communicated back to the offeror (buyer or buyer's agent). Acceptance is not effective until it is actually communicated; a signed acceptance sitting on the seller's desk does not create a contract. This reflects the general contract principle of offer and acceptance as applied in Tennessee real estate transactions.
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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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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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