A buyer submits a Utah REPC offer on a St. George home for $485,000 with a $10,000 earnest money deposit. The seller counters at $495,000. The buyer then counters back at $490,000. The seller accepts the buyer's $490,000 counteroffer in writing and the buyer's agent is notified. Under the REPC, when does a binding contract exist?
Correct Answer
D) When the buyer's agent was notified of the seller's acceptance of the $490,000 counteroffer
Under Utah contract law and the REPC, a binding contract is formed when acceptance is communicated to the offeror or the offeror's authorized agent. Even though the seller signed the acceptance, the contract does not become binding until the buyer's agent (who is the buyer's authorized representative) is notified of that acceptance. Notification to the buyer's agent constitutes notification to the buyer, completing the mutual assent required for contract formation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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