A Wisconsin buyer and seller execute a WB-11 Offer to Purchase. The contract includes a secondary offer (backup offer) clause. Before closing on the primary offer, the primary buyer defaults. The seller wants to proceed with the backup buyer. Under Wisconsin contract law, what must occur before the backup offer becomes binding?
Correct Answer
B) The seller must formally terminate the primary contract and provide written notice to the backup buyer that their offer is now accepted.
Under Wisconsin contract law and the WB-11 backup offer provisions, a backup offer does not automatically become binding upon the primary buyer's default. The seller must take affirmative steps: formally terminate the primary contract (either through mutual agreement, default declaration, or other contractual mechanism) and then provide written notice to the backup buyer that the primary contract has ended and the backup offer is now accepted. Only upon this written notice does the backup offer become a binding contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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