Contracts
A buyer's offer specifies that the seller must accept by 5:00 PM on Friday. The seller signs and mails the acceptance Thursday evening but it arrives Monday. Is there a contract?
AYes — the mailbox rule makes acceptance effective upon mailing
BNo — the acceptance did not arrive within the stated deadline✓ Correct
CYes — any written acceptance within 5 business days is valid
DIt depends on whether the buyer received the acceptance before they revoked the offer
Explanation
When an offer specifies a deadline, acceptance must be communicated (received) by that deadline. If the seller specified acceptance by mail would be effective upon dispatch, the mailbox rule might apply.
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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 ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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