When a seller makes a counteroffer in response to a buyer's original offer, the legal effect is that the original offer is:
Correct Answer
B) Rejected, and a new offer is created for the buyer to accept or decline
A counteroffer simultaneously rejects the original offer and creates a new offer with different or modified terms. Once a counteroffer is made, the original offer is extinguished and the buyer is no longer bound by it. The buyer may accept, reject, or counter the new terms. The original offer cannot be revived unless both parties mutually agree to reinstate it. This principle applies to all real estate contract negotiations in Rhode Island.
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Related Topics & Key Terms
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Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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