Counteroffers, a Text Message Acceptance, and a Financing Contingency
On March 1, buyer sends an offer with expiration March 3 at 5:00 p.m. Seller signs March 2 at 4:00 p.m. but changes the closing date from May 15 to May 30 and emails buyer’s agent at 4:55 p.m. The agent reads it at 6:10 p.m. On March 3 at 9:00 a.m., buyer emails: “We accept the May 30 closing, but the washer/dryer must stay.” Seller replies by text, “fine.” Buyer learns on March 20 that financing was denied. The contract has a 21-day financing contingency from acceptance and a $15,000 deposit due within three days of acceptance; the deposit has not been delivered. Seller wants to keep the deposit and sue for breach. The purchase agreement requires written notice of financing denial within three days and a written signature for any amendment; the seller’s text was sent from his personal phone and includes his name.
1. Was there a binding contract, and if so, when was it formed? Consider the counteroffer, the washer/dryer term, and the seller’s text.
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The buyer’s March 1 offer expired March 3 at 5:00 p.m. The seller’s March 2 change of closing date was a counteroffer, which terminated the original offer. The buyer’s March 3 email accepted the May 30 closing but added a washer/dryer term; that is a new counteroffer under the mirror-image rule, not an acceptance. The seller’s text “fine” can be an acceptance if it is attributable to the seller and sufficiently definite. The Statute of Frauds usually requires a writing signed by the party to be charged; an electronic text can satisfy that if the sender is identified and the message shows assent to the essential terms. The deposit is not usually required for contract formation. So a binding contract likely formed when the seller sent “fine,” but the file should confirm the text’s authenticity, the seller’s phone number, and whether the washer/dryer term was included.
2. Can the buyer recover the deposit or avoid the contract based on the financing denial?
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The financing contingency runs 21 days from acceptance. If acceptance occurred March 3, the deadline was about March 24; the buyer learned of denial March 20 and should give written notice immediately. The buyer must also show diligent loan application and that denial was not caused by buyer misconduct. If the buyer timely notifies, the contingency excuses performance and the deposit should be refunded. But no deposit was actually delivered; the seller cannot keep a deposit that was never paid. The seller may argue the buyer breached the deposit deadline, but that breach is separate from the financing contingency and does not automatically convert the deposit into liquidated damages. The buyer should send written notice and demand return of any funds; if none were sent, document that.
3. What are the seller’s remedies, and what should the agents do now?
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The seller may claim breach only if the buyer failed to satisfy a condition or refused to close without a contractual excuse. If the buyer timely invoked financing, the seller’s damages claim is weak. The seller cannot keep a deposit that was never delivered. The listing agent should not threaten to keep funds; the broker should review the contract and timeline. The buyer’s agent should confirm the financing deadline, send written notice, and advise the buyer not to waive the contingency. Both agents should preserve emails, texts, and the offer/counteroffer chain. If the seller sues, the court will decide whether the text was a signed writing and whether the washer/dryer term was material. The parties should consider a mutual release rather than litigation.