A seller in McLean lists her home and receives an offer. Before responding, she signs a second listing agreement with a different broker who also procures an offer. The seller accepts both offers in writing on the same day, apparently intending to pick the best outcome. Both buyers' agents discover the situation simultaneously. Under Virginia law and license law, which statement most accurately describes the legal and regulatory consequences?
Correct Answer
D) Both contracts are voidable by the respective buyers, and the seller may face civil liability for breach; the seller's agents may face VREB discipline if they knew of the dual listings
A seller cannot convey the same property twice — accepting two purchase contracts simultaneously creates an impossible performance situation. Both contracts are valid and binding as written, but one cannot be performed. The buyers have grounds to rescind (voidable) or sue for breach of contract and damages. The seller faces civil liability to whichever buyer does not receive the property. Additionally, if either listing agent knew about the dual listing situation and failed to disclose it or facilitated the fraud, that agent could face VREB disciplinary action under Va. Code § 54.1-2131 for dishonest or fraudulent conduct.
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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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