Buyer Hana submits an offer on a Germantown property with an expiration of Saturday at noon. On Friday evening, the seller submits a written counteroffer changing only the closing date. On Saturday at 10 AM — before the seller's counteroffer deadline has expired — Hana sends a written rejection of the counteroffer and states she wants to accept the original offer terms. The seller then tries to accept Hana's original offer. Under Tennessee law, which of the following is correct?
Correct Answer
D) No binding contract exists because the seller's counteroffer terminated Hana's original offer, and Hana's rejection of the counteroffer ended all negotiations
Under Tennessee contract law, when the seller issued a counteroffer, Hana's original offer was legally terminated. The counteroffer substituted a new offer from the seller. When Hana rejected the seller's counteroffer, that rejection ended the seller's outstanding offer. At that point, there was no offer on the table for either party to accept. The seller cannot revive Hana's original offer because it was extinguished by the counteroffer. Tennessee law does not provide for automatic revival of a terminated offer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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