A buyer submits a Wisconsin WB-11 Residential Offer to Purchase for a home in Green Bay. Before the seller accepts, the buyer calls the listing agent and says, 'I want to withdraw my offer.' The seller then signs the original offer and the listing agent notifies the buyer. What is the legal status of the transaction?
Correct Answer
B) No binding contract exists because the buyer revoked the offer before the seller accepted
Under Wisconsin contract law, an offeror may revoke an offer at any time before acceptance is communicated, as long as the revocation itself is communicated to the offeree (or the offeree's agent) before acceptance. Here, the buyer communicated withdrawal to the listing agent — who is the seller's agent — before the seller's acceptance was communicated back to the buyer. The offer was validly revoked, so no contract was formed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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.
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