New York Real Estate Salesperson ExaminationContractsMedium
A buyer makes an offer to purchase a residential property. The seller receives the offer and decides to accept it. Before communicating this acceptance to the buyer, the seller receives a significantly higher offer from another party and decides to accept the second offer instead. Is the seller legally bound to the first buyer?
- AYes, because the seller intended to accept the first offer.
- BYes, because the seller's initial decision to accept created a moral obligation.
- CNo, unless the first offer was communicated verbally.
- DNo, because acceptance must be communicated to the offeror to be effective.
Show answer & explanationAnswer & explanation
Correct answer: D. No, because acceptance must be communicated to the offeror to be effective.
Acceptance of an offer is not effective until it is communicated to the offeror. Until communication occurs, the offeror can revoke their offer, and the offeree (seller in this case) is not legally bound.
Why the other options are wrong
- A. Intent to accept, without communication, does not create a binding contract.
- B. Moral obligations are not legally enforceable in contract law.
- C. The medium of communication (verbal vs. written offer) is not the issue; the lack of communication of acceptance is key.
Communication of Acceptance
For an offer to be validly accepted and form a binding contract, the acceptance must be communicated to the offeror by the offeree or their authorized agent.
- Acceptance must be conveyed.
- Silence generally not acceptance.
- Mailbox Rule exception for proper dispatch.
Memory trick: Acceptance isn't real until it's 'Heard or Read' by the offeror.