The Best of the Legal Hotline: Acceptance, Personal Delivery, Withdrawing Offers


 Debbi Conrad and Tracy Rucka  |    January 24, 2007
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The following questions about acceptance issues were recently asked of the Legal Hotline:

What is acceptance?

An offer was submitted to two sellers, but only Mrs. Seller signed it before the deadline. Mr. Seller did not sign it until the next day. Does the 14 days for the inspection contingency start the day after the first seller signed or the day after the second seller signed? 

Line 17 of the residential offer says that acceptance has occurred when all buyers and sellers have signed an identical copy of the offer. Binding acceptance requires the signatures of all parties plus delivery of the signed offer back to the buyer by the acceptance deadline.

The inspection contingency runs from the date of acceptance. In the described situation, that would be the day the last party, Mr. Seller, accepted the offer.

In the described scenario, however, there is another issue of greater importance. If Mr. Seller did not sign until the day after the acceptance deadline, then there is not a binding offer. There could not have been delivery of the fully signed offer back to the buyer by the deadline because Mr. Seller did not sign until the next day.

To correct this deficiency, one party ‚ÄĒ sellers or buyers ‚ÄĒ may counter to the other party on the same terms and conditions as were in the offer, allowing for ample time for signatures and timely delivery.

Acceptance deadline

A buyer submitted an offer to the seller who could not decide whether to accept it. After the acceptance deadline passed, the seller decided to accept the offer. The buyer’s agent asked the listing agent to draft an amendment to extend the deadline by two days. How can the agent extend the deadline for binding acceptance? 

Binding acceptance occurs when an accepted offer is delivered back to the other party on or before the stated deadline for acceptance. Once the acceptance deadline has passed, the seller cannot accept and deliver the offer back to the buyer to create a binding contract. However, either the buyer or the seller may initiate a counteroffer back to the other party that incorporates the original offer without any changes. This use of the WB-44 "Counteroffer" form will create a new acceptance deadline for the parties to meet.

Personal delivery

The selling agent did not complete any of the blanks in the "delivery" area of the offer. Nothing was inserted, not even dashes. What effect does this have? 

The offer to purchase allows the buyers and sellers to choose the methods of delivery that may be used to create binding acceptance. Because no number was provided for faxing and no address was provided for mailing, neither faxing nor mailing are available as methods of delivery in this transaction. That leaves personal delivery as the only available method for delivery. Personal delivery means that the document or written notice is personally given to either the party or the party’s designated recipient for delivery if an individual has been named in the offer. No recipient for delivery was named, so personal delivery to the buyer is the only authorized method of delivery in this offer.

Can the buyer use a real estate office’s address for delivery, or must the buyer indicate a specific person for delivery, like the agent working with the buyer in the transaction?

Pursuant to the terms of the WB-11 residential offer to purchase, any designated recipient for delivery is named at line 27 or 29. Line 31 states that if an individual is named at line 27 or 29, personal delivery may be accomplished by getting the document to the designated individual. It is up to the brokers and their parties to determine whether they prefer to designate the company or the agent as the recipient for delivery. If the agent is named, personal delivery to the agent is possible. If the company is named, the company will be the addressee on mail and commercial deliveries only and cannot be the recipient for personal delivery.

Fax and mail delivery; actual receipt

A bump notice was mailed to the buyer and then it was faxed to the buyer’s attorney. The attorney believes the time started to run when the attorney received the faxed notice even though she is not a recipient for delivery and her fax number is not on the front of the offer. The buyer received the mailed copy a couple of days later. 

Unless the offer is modified, the only methods of delivery that are legally effective for the delivery of documents and notices with respect to an offer to purchase are: (1) mail or commercial delivery service, (2) personal delivery or (3) fax transmission.

When using mail or commercial delivery such as UPS or FedEx, all postage and fees must be prepaid or properly charged to an account with the delivery service. The offer permits each party to provide a delivery address. The sole purpose of this address is for use in addressing documents and written notices that are mailed or commercially delivered. This address has no effect for personal or fax deliveries.

A document or written notice is delivered via fax when it is transmitted to the fax number stated in the contract. Unless the buyer and seller agreed to use the fax number at the attorney’s office, faxing to the attorney does not create delivery per the offer to purchase.

A bump notice must be delivered using the delivery methods authorized in the offer, but a second additional standard must also be met: the buyer must have actual receipt of the notice. "Actual receipt" generally means that the buyer has the written notice in his or her hands, regardless of whether it came by personal delivery, mail or fax. The buyer will have actual receipt when he retrieves it from his mail or if the attorney gets the notice to him. It may be advisable to provide that mail is not an appropriate means of delivering a bump clause notice because it may take a long time, delaying the process.

Withdrawing offers before binding acceptance

The listing agent was about to deliver an accepted offer to the sub-agent when the buyer called and withdrew the offer. What is the status of this offer? 

A party who has made an offer is, in all but a relatively few situations, able to withdraw the offer any time prior to its binding acceptance. The law requires the party withdrawing the offer to notify the person who has the offer that the offer is withdrawn. If the notice of withdrawal arrives before a binding acceptance, the offer becomes null and void. Any attempt at acceptance or delivery of the offer thereafter, even if prior to the stated time limit for acceptance will have no legal effect. Notice of withdrawal does not have to be in writing. However, the party attempting to withdraw the offer must try to make certain that proof is available that the offer has not been accepted and delivered.

For additional discussion of acceptance and delivery issues, see pages 4-6 of Legal Update 01.11, "Best of the Legal Hotline ‚ÄĒ Offer to Purchase Issues," at www.wra.org/LU0111.

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