Lisa is a Virginia salesperson representing a buyer. She presents an offer to the listing agent on Tuesday. The listing agent tells Lisa that the seller has accepted and will sign the contract tonight. On Wednesday morning, before the signed contract is returned to Lisa, another agent presents a higher offer to the listing agent, and the seller decides to accept that offer instead. The original buyer claims a binding contract was formed. Which statement best describes the legal situation under Virginia law?
Correct Answer
C) No binding contract was formed because the seller's acceptance was never reduced to writing and communicated to the buyer
Virginia's Statute of Frauds (Va. Code § 11-2) requires that contracts for the purchase and sale of real property be in writing and signed by the party to be charged. A verbal statement by the listing agent that the seller 'accepted' does not constitute a legally binding acceptance. Until the seller's signed written acceptance is communicated to the buyer or buyer's agent, no enforceable contract exists, and the seller remains free to accept another offer.
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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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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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