James submits an offer to purchase a home in Redmond for $625,000 with a closing date of March 15. The seller counters in writing, changing the price to $640,000 but keeping all other terms. James signs the counteroffer accepting the $640,000 price. Before James's broker delivers the signed counteroffer back to the seller, the seller calls and says she has changed her mind and is withdrawing the counteroffer. Which statement best describes the legal situation?
Correct Answer
B) The seller can withdraw the counteroffer because acceptance has not yet been communicated back to the seller.
Under Washington contract law, a counteroffer is itself an offer that can be revoked at any time before acceptance is communicated back to the party who made the counteroffer (here, the seller). Although James signed the counteroffer accepting $640,000, that signed acceptance was never delivered or communicated to the seller before she withdrew. Without communication of acceptance, no binding contract was formed, and the seller retains the right to revoke the counteroffer. The seller's withdrawal is legally effective.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
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