Mutual assent: offer & acceptance

Real estate contracts can be scary beasts. Mutual assent, as we discussed in our Intro-to-Contracts lesson, is one of the four requirements for valid real estate contracts. OK, for any contract, really, but we’re talking about real estate contracts here.Real estate contracts | Randall Brennan | Highlands Ranch realtor

By the way, the usual disclaimer applies: As you know, I’m not a lawyer. This post is not intended to provide legal advice, only to provide a bit of enlightenment. If you need legal advice, please contact an attorney.

With that out of the way, let’s jump into this business of mutual assent, especially as it pertains to real estate contracts.

As you’ve probably guessed, mutual assent just means that everyone involved in the contract needs to agree on what that contract actually says, and what it’s to be used for. As with real estate contracts as a whole, mutual assent has different parts, that will probably get progressively confusing:

  • offer
  • acceptance
  • reality of consent
  • statute of frauds
  • parol evidence rule

We’ll take them one-by-one, but we’re only going to talk about the first two in this post. Otherwise the post just gets way too long. (Don’t say “and boring,” please.)


The offer is probably the easiest part of real estate contracts to understand on the surface, but even here, there are several issues that need to be considered.

In order for anything to progress to the eventual sale of the property, somebody has to make an offer to get the ball rolling. An offer is simply the promise of someone, called the offeror, to do something specific if the other person, the offeree, will do some other specific thing in return. Usually the offeror is the potential buyer, making an offer to the seller. At this point — with just an offer — there is no contract yet.

Just because you’ve put an offer out there, does not mean it lives forever and ever until it’s accepted by the offeree. There are ways to cancel the offer.

First, your offer could be terminated by “rule of law.” If any of the parties dies (or is declared incompetent), the subject of the offer is destroyed, or a change in law makes the object of the offer illegal, then the offer terminates, and you can’t enforce anything.

You could also make your offer, as is typical with real estate contracts, with a deadline attached that automatically terminates the offer. The seller has to respond within a certain period of time, or the offer simply terminates. No one has to do anything. The length of time doesn’t need to be spelled out, but it usually is in real estate contracts. That doesn’t mean that an offer could live forever, though. If the offeree doesn’t take some kind of action, the offer will cease to be after a “reasonable” amount of time. What’s “reasonable”? It depends, and will probably have to be decided by a court if it’s disputed.

In an interesting twist, you can revive a null-and-void offer with ratifying acceptance. That’s just fancy talk for “letting it happen.” It works like this: you make an offer with a deadline, but the seller (let’s just assume we’re talking about real estate contracts here) doesn’t respond before the deadline. The offer is considered to be dead. If the seller “accepts” the offer after the deadline, however, it’s automatically resurrected unless you, the buyer, do something to stop that as soon as you hear about the “acceptance.”

For example, when you hear after the deadline that the seller is accepting the offer, and you don’t very clearly tell the seller that the offer is no longer in play, then you’ve ratified its acceptance. Not acting, and just letting the seller proceed will be considered ratification, and you won’t be able to say later that the offer was dead when it was not accepted before the deadline. You have to declare it over as soon as you find out the other party is proceeding under the assumption of acceptance. That just makes sense, anyway: solve problems sooner rather than later.

You can also cancel an offer by revoking it. All you have to do is withdraw it before the other party accepts it, even if you’ve said the offer will be open for a certain period of time. Revoking doesn’t need to be in writing, but it’s a good idea to support the revocation with a written statement. (There is an instance when an offer cannot be revoked, and that’s when there’s option involved. We’ll get into that in another post.)

An offer can also be terminated if the offeree rejects it. It goes like this:

“Hey! I’ll pay you $20 for your condo.” (This is the offer. See the promise to do something in exchange for something else?)
“Um. No.” Denied. Offer rejected . . . and terminated. End of negotiating.

UNLESS . . . .

“Um. No, BUT I’ll take $250,000 for it.”

Did you see what happened there? The seller (the offeree) rejected the buyer’s (the offeror’s) offer, and replaced it with another, different, offer. This is called a counteroffer. Slick as that, the positions of the offeror and the offeree have been switched. This game of switching back-and-forth can go on and on, until both parties agree to all the terms, and we have . . .


Acceptance is probably just about as easy to understand as the offer portion from the section above. The offeree, in response to the promise from the offeror, agrees to do as the offeror asked, and is said to have accepted the offer. When the offeree accepts the offer, we have, for all intents and purposes, and subject to the rest of the issues raised in offer and acceptance, a contract. Providing, of course, that the other three requirements of a valid contract are in place.

Got it? It’s way easier to do than to say, that’s for sure. If you’re confused, it helps to draw a picture. Really.

This has probably been the longest post I’ve ever written, so let’s say this is enough for now. I told you real estate contracts have a lot of issues, and we’ve only begun to scratch the surface. You’ll want to stick around for more.

Now, what’s confusing you? Let me know in the comments section below.

So what’s next? Take your pick.


 Randall Brennan | Highlands Ranch real estate | search for listings

Yeah. You should probably do at least one of those things right now.