Reference no: EM132262647

Jon and Marsha were both accounting students and were taking a wonderful Business Law class together from a wonderful professor-the same one you now have. They had a limited knowledge of contracts, but they knew they should employ a Real Estate Agent to facilitate their purchase. They called a local hot-shot realtor to help them find the perfect property to start their life together. After much searching, they found a 3 bedroom 2 bath home on a nice cul-de-s8c in a quiet, newer neighborhood on the outskirts of town.

They sat down with their Agent to fill out their offer to purchase on a Utah Real Estate Purchase Contract (REPC). They discussed the home and its amenities. They loved the fact that the home had an outdoor, portable hot tub under the stars. It could be easily moved under cover into the carport in bad weather. They also loved the appliances that were in the kitchen. They particularly loved the 6-burner, Maytag gas range. They decided to ask for them to be included in the purchase price. The home was listed on the Multiple Listing Service (MLS) for which seemed to be a little high for the neighborhood. Jon and Marsha decided to offer $207,000 with the seller paying 3% towards closing costs and for title insurance and for property taxes and for needed repairs.

Jon signed the REPC on the line for the Buyer (see Page. 6). In paragraph 25 of the REPC, Jon put the time for acceptance as 12 PM, 25 February 2011.

The REPC said on P.l that the BUYER had included a post-dated check for $5,000. The broker marked the box “delivered” even though Marsha did not have her check book with her. She promised the agent that she would bring it to him ASAP.

Buyer’s Broker delivered the REPC to Seller's Broker, through a sales agent on the day after the REPC was completed by Jon and Marsha.

Jon and Marsha had specifically marked the applicable boxes on page #1, Paragraph 1.2 for the washer; the dryer; the frig; the water softener; and the security system. They also marked the required boxes throughout the REPC.

Seller received the offer on the 21 February 2011.

Seller marked, I accept with the following conditions. Buyers' will have one (2) day to accept terms contained in Addendum #1.

See ADDENDUM #1:

Seller returned REPC with Addendum #1 to Buyer's Broker.

Jon marked, I accept on Addendum #1 with the following conditions.

See ADDENDUM #2

Jon had his acceptance notarized the next day and gave it to his Broker, who gave it to the Seller's Broker. Seller's Broker got busy and distracted, and he forgot to give it to the Seller until 10 AM. Broker reminded Seller that she only had until 12 AM to respond. Seller said that was ok, because she would put it in the mail by 11 PM, and that would be the time of acceptance.

(She knew the mailbox rule) She mailed the acceptance at 10:15 PM. She immediately had seller's remorse and changed her mind. She called the Buyer at 12:30 AM and said on her answering machine, “I reject your offer. The deal is off. I will not sell my home at any price.” The BUYERS had not yet received SELLER'S acceptance.

Right after Buyers had mailed their last offer to Seller, but before seller had mailed an acceptance (see addendum #2), UB Flash (Upscale housing community) announced it was building just down the road from Seller's house. Because of this announcement, the value of the Seller's house jumped $100 K. Marsha heard about UB Flash's plans and quickly called Seller's Broker on the phone and told him that she would like to accepted seller's offer on seller's terms (see Addendum #1). She told Seller's Broker she could close by 15 April 2011. Seller's Broker was way excited to make a sale. And without contacting seller, Seller's Broker told Buyer, “I accept your offer. You have just bought yourselves a house.” Marsha said, “Fantastic. I’ve got all the money for the house in a trust.”

That same day, Buyer #2 who is an undisclosed agent for UB Flash, offers the Seller over the phone $300K cash with no conditions, as is, close in 10 days. Buyer #2 promises a $20,000 non- refundable earnest money with the oral offer. Seller does not know of her Agents actions with Marsha; therefore, she, the Seller, promises to sign the REPC as soon as buyer #2 mails it to her. She tells buyer #2, “I accept with no reservations or conditions.”

Jon learns of seller's intent to sell to Buyer #2 and sues to enforce his rights under his REPC.

QUESTION: There were several purportedly contractual negotiations or transitions in the case description. If you decided that some of those transactions do not qualify as a contract, detail and describe why.