Humber/Ontario Real Estate Course 4 Exam Practice

In negotiations, if a counter-offer from the seller is rejected by the buyer but the seller later agrees to the original offer within the irrevocable time frame, what happens?

1. The parties enter into a binding contract because the seller accepted before the irrevocable time expired.

2. The negotiations end as a mutual agreement was not achieved.

3. The initial offer remains open for acceptance until the irrevocable period ends.

4. The seller cannot accept the original offer since it is invalid without the buyer's wife's signature.

The correct answer is: The negotiations end as a mutual agreement was not achieved.

In this scenario, the situation revolves around the concepts of offers, counter-offers, and acceptance. The buyer's rejection of the counter-offer signifies that they don't agree to the new terms proposed by the seller. However, since the seller later decides to accept the original offer within the designated irrevocable timeframe, this acceptance is crucial. The correct understanding is that the seller's acceptance of the original offer before the expiration of the irrevocable period creates a binding contract. This acceptance is valid, as it occurs within the stipulated time frame, which is an important element of contract law. The notion of an irrevocable offer reflects that the offeror (the seller) cannot retract the original offer while the time period is active. Thus, if the seller reverts to the original offer and communicates acceptance within this timeframe, a binding contract is constituted. The conclusion drawn from this analysis emphasizes the importance of timelines and clear communication in negotiations, as a contract can indeed be formed if acceptance adheres to stipulated conditions. Therefore, the dynamics of what constitutes mutual agreement and the status of offers and rejections are critical in this context.