National Real Estate Exam (PSI)ContractsMedium
A seller sends a buyer a written offer to sell a property for $400,000, stating the offer 'will remain open for 10 days.' No option consideration is paid by the buyer. Two days later, before the buyer accepts, the seller sells the property to a third party and immediately notifies the buyer in writing that the offer is withdrawn. Is the seller's revocation effective?
- AYes, but only because the buyer had not yet retained an attorney to review the offer
- BNo, because the seller's written promise to hold the offer open for 10 days is legally binding
- CNo, because revocation of an offer must occur through the same method used to make the offer
- DYes, because without consideration to keep the offer open, the seller may revoke at any time before acceptance
Show answer & explanationAnswer & explanation
Correct answer: D. Yes, because without consideration to keep the offer open, the seller may revoke at any time before acceptance
An offer is generally revocable at any time before acceptance unless the offeree has paid consideration to keep it open (creating an option contract). A mere promise to hold an offer open for a stated time is not binding without consideration, so the seller's revocation before acceptance is valid.
Why the other options are wrong
- A. Legal representation is irrelevant to the revocability of an unsupported offer.
- B. A promise to keep an offer open is unenforceable without separate consideration.
- C. There is no legal requirement that revocation match the form of the original offer, only that it be communicated.
Revocation of Offer
An offeror may withdraw an offer at any time before it is accepted, unless the offeree has paid consideration to hold the offer open (an option).
- Offers are freely revocable before acceptance unless supported by consideration
- A stated time period alone does not make an offer irrevocable
- Option contracts require consideration to bind the offeror to keep the offer open
Memory trick: 'No pay, no stay' — without consideration, an offer can walk away anytime