Texas Real Estate Sales Agent ExamContractsHard
A buyer makes an offer on a property, and the seller counters. The buyer reviews the counteroffer and decides to accept it, but before the buyer communicates acceptance, the seller calls to withdraw the counteroffer. What is the status of the offer and counteroffer?
- AThe original offer is now reinstated and can be accepted by the buyer.
- BA valid contract has been formed because the buyer intended to accept.
- CThe counteroffer is revoked, and no contract exists.
- DThe seller is in breach of contract for withdrawing the counteroffer.
Show answer & explanationAnswer & explanation
Correct answer: C. The counteroffer is revoked, and no contract exists.
An offer or counteroffer can be revoked by the offeror at any time before it has been accepted and communicated to the offeror. Since the seller withdrew the counteroffer before the buyer communicated acceptance, there is no contract.
Why the other options are wrong
- A. A counteroffer implicitly rejects the original offer, so the original offer is no longer on the table unless explicitly revived.
- B. Acceptance must be communicated to the offeror to form a valid contract, mere intent is not enough.
- D. The seller has the right to withdraw a counteroffer before it is accepted, so there is no breach of contract.
Revocation of Offer/Counteroffer
The act of withdrawing an offer or counteroffer by the offeror before it has been accepted by the offeree.
- Must be communicated to the offeree.
- Can occur any time before acceptance.
- Once revoked, the offer/counteroffer is no longer available for acceptance.
Memory trick: O.C.A.R. - Offer, Counter, Acceptance, Revocation are key steps.