Under the Utah REPC, a seller issues a counteroffer that changes the purchase price but leaves all other terms unchanged. The buyer initials the counteroffer to indicate acceptance and the buyer's agent immediately emails a signed copy to the listing agent. Which of the following statements about the resulting agreement is most accurate?
Correct Answer
D) A binding contract is formed when the listing agent receives the buyer's signed acceptance of the counteroffer
Under Utah contract law, when the buyer accepts the seller's counteroffer and communicates that acceptance to the seller's authorized agent (the listing agent), a binding contract is formed at that moment. The listing agent is the seller's authorized representative, so delivery to the listing agent constitutes delivery to the seller. No additional countersignature, new document, or earnest money deposit is required to establish the binding nature of the agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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