Maria submits a written offer to purchase a home in Madison, Wisconsin, with a deadline of 5:00 PM on Friday. The seller signs the acceptance at 4:45 PM on Friday but does not notify Maria until Saturday morning. Which statement best describes the legal status of this transaction under Wisconsin law?
Correct Answer
A) No binding contract was formed because acceptance was not communicated to Maria before the offer deadline
Under Wisconsin law, an offer expires at its stated deadline if acceptance has not been communicated to the offeror by that time. Although the seller signed before 5:00 PM Friday, acceptance was not communicated to Maria until Saturday — after the offer had already expired. Therefore, no binding contract was formed. The seller's late notification constitutes a counteroffer, which Maria may accept or reject.
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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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