A seller in Sandy, Utah receives two offers on the same day using the Utah REPC. Offer 1 is for $520,000 with a 30-day closing. Offer 2 is for $510,000 with a 20-day closing. The seller signs Offer 1 as written and instructs her agent to notify the first buyer. Before the agent notifies Buyer 1, the seller also signs Offer 2 as written. What is the legal status of these two acceptances?
Correct Answer
C) Only the contract communicated to a buyer first is enforceable; the other acceptance has no legal effect
Under Utah contract law, a binding contract is formed when acceptance is communicated to the offeror. Since neither buyer has been notified yet, no binding contract exists at the moment the seller signs both acceptances. The first acceptance that is actually communicated to the respective buyer's agent creates the binding contract. The second communication, even if made moments later, would be an attempt to accept an offer by a seller who no longer has the property available to sell, making that acceptance legally ineffective.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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.
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