New York Real Estate Salesperson ExaminationContractsEasy
A buyer submits an offer on a property. Before the seller accepts, the buyer finds a different property they prefer and decides to withdraw their original offer. What is the legal status of the buyer's initial offer?
- AIt automatically becomes a counteroffer.
- BThe buyer is legally obligated to proceed with the original offer.
- CIt is terminated and holds no legal standing.
- DIt remains open for a reasonable time.
Show answer & explanationAnswer & explanation
Correct answer: C. It is terminated and holds no legal standing.
An offer can be withdrawn by the offeror at any time before it has been accepted by the offeree. Once withdrawn, it is terminated and can no longer be accepted.
Why the other options are wrong
- A. An offer does not automatically become a counteroffer upon withdrawal; a counteroffer is a new offer made in response to an initial offer.
- B. The buyer is not legally obligated to proceed if they withdraw their offer before acceptance, as no contract has been formed.
- D. While offers typically remain open for a 'reasonable time' if no specific duration is stated, the buyer's withdrawal explicitly terminates it prior to acceptance.
Revocation of Offer
The withdrawal of an offer by the offeror before it has been accepted by the offeree.
- Must occur before acceptance.
- Terminates the offer.
- Can be communicated directly or indirectly.
Memory trick: An offer's life ends fast if it's taken back.