10.2 Contract Creation
10.2 Contract Creation
A contract is created through offer and acceptance—the offeror proposes terms, and the offeree accepts without changes. Any change is a counteroffer, which voids the original offer.
- Offer: Must state all terms clearly and be communicated to the offeree.
- Acceptance: Must be unequivocal and communicated to the offeror to form a contract.
- Counteroffer: Any change creates a new offer; the original is void.
- Revocation: An offer can be revoked any time before acceptance is communicated.
- Termination: Offers can terminate by acceptance, rejection, revocation, expiration, counteroffer, or death/insanity.
- Assignment: Most real estate contracts (not personal service contracts) can be assigned unless prohibited in the contract.
- Contract preparation: State law limits what contracts brokers/agents can prepare; unauthorized practice of law is prohibited.
Topic 10.2 Check-In
Making an Offer Stick
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What happens if an offeree changes any term of an offer?
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