ContractsIntermediateAlaska Exam

A buyer submits an offer on a home. Before the seller accepts, the buyer calls the agent to withdraw the offer. This is:

ANot possible once an offer is submitted in writing

BPermitted because an offer may be revoked at any time before acceptanceCorrect

CPermitted only if the buyer pays a cancellation fee

DNot permitted if the seller has already begun reviewing the offer, in general

Why Permitted because an offer may be revoked at any time before acceptance Is Correct

Answer B: Permitted because an offer may be revoked at any time before acceptance

Under contract law, an offer can be revoked by the offeror at any time before it is accepted, as long as the offeror communicates the revocation before the offeree has communicated acceptance. Once the seller communicates acceptance, the offer can no longer be revoked.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

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Key Terms to Know

Earnest Money

A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

Purchase Agreement

A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.

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Real Estate Contracts Guide

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