Word of the day
Once the buyer submits an offer to buy for the seller’s acceptance, if the seller makes any change to the offer—no matter how slight—such change constitutes a counteroffer, and terminates the original offer and bars its subsequent acceptance. Thus, if the seller changes the suggested closing date from 10:00 am November 10, 2013, to 11:00 am November 10, 2013, initials the change, and signs the sales contract, the seller has made a counteroffer. The roles of the parties then reverse. There is no obligation on the buyer to either accept or reject the counteroffer. To create a valid contract, the buyer must accept the terms of the counteroffer within a certain period of time. Note that a simple inquiry as to whether the offeror would be willing to change the terms of an offer is not sufficient to constitute a rejection of the offer or a counteroffer.
A common practice has been for the seller to make a change to the buyers’ sales contract, initial and date the change, and transmit it to the buyers for acceptance. If the buyers then wanted to make a change to the altered contract, they in effect would be making a counter-counteroffer.
It is poor practice to rely on a contract that has many initialed changes, because it is difficult to determine at what point a valid contract actually exists. The parties should execute a written counteroffer. If a buyer wishes to make a counteroffer in response to the seller’s counteroffer form, the buyer should probably begin the process anew by completing a new sales contract offer.
Because it is important to be able to determine the chronology of events, each change should be time-dated. In addition, the broker must give a copy of the changes to the signing party at the time such changes are made, not afterward.
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