A buyer in Virginia submits an offer to purchase a home. The seller responds with a counter-offer changing the closing date and purchase price. Before the buyer signs the counter-offer, the seller calls the buyer's agent and says he is withdrawing the counter-offer because he received a better offer. The buyer's agent immediately calls back saying the buyer has decided to accept the original counter-offer. Is there a binding contract?
Correct Answer
C) No, because the seller withdrew the counter-offer before the buyer communicated acceptance, and an offer can be revoked before acceptance
Under Virginia contract law, an offer (including a counter-offer) may be revoked by the offeror at any time before acceptance is communicated. The seller withdrew the counter-offer before the buyer signed and communicated acceptance. Therefore, there was no meeting of the minds, and no binding contract was formed. The revocation was effective because it was communicated before acceptance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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.
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