A seller in Franklin, Tennessee accepts a buyer's offer in writing. The signed acceptance is placed in the listing broker's desk drawer and never sent to the buyer or the buyer's affiliate broker. Three days later, the seller changes her mind and calls the listing broker to say she no longer wants to sell. Under Tennessee law, which of the following is correct?
Correct Answer
A) No binding contract was formed because the acceptance was never communicated to the buyer or buyer's agent
Under Tennessee contract law, an acceptance must be communicated to the offeror (or the offeror's authorized agent) to be legally effective. A signed acceptance that sits in the listing broker's desk and is never transmitted to the buyer or buyer's agent has no legal effect. Because acceptance was never communicated, no binding contract was formed, and the seller may change her mind without being in breach of contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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