CATEGORY: Contracts (General) 

TITLE: Offer Cannot Be “Accepted” After It Expires 

FACTS: The seller sent a counteroffer to Buyer #1 that expired on Monday at 6:00 p.m.  On Tuesday, the seller accepted an offer from Buyer #2.  Around 2:00 p.m. on Tuesday, Buyer #1 accepted the seller’s counteroffer.

ISSUE: Do Buyer #1 and the seller have a binding contract?

ANSWER: No

DISCUSSION:

Lines 13-15 of the AAR Counter Offer provide that if acceptance of the Counter Offer is not signed by all parties and delivered to the seller’s broker by the time specified in the Counter Offer, then the Counter Offer is considered withdrawn.  Therefore, the seller’s counteroffer was considered withdrawn as of 6:01 p.m. on Monday.  As a result, there was no counteroffer for Buyer #1 to accept on Tuesday and there is no binding contract between Buyer #1 and the seller.


CATEGORY: Agency

TITLE: An Agent Should Not Represent A Family Member In A Dual Agency Transaction

FACTS: The agent, while not a party to the transaction, is representing his wife and son in the purchase of a property and has disclosed this relationship to the seller.

ISSUE: Is it advisable for the agent to also represent the seller of the property as a dual agent?

ANSWER: No

DISCUSSION:

Dual agency imposes restrictions on the conduct of a licensee.  Among others, a dual agent may not favor one party over another nor disclose confidential information, such as the price the buyer is willing to pay, without the informed consent of that party. See Haymes v. Rogers, 70 Ariz. 408, 222 P.2d 789 (1950).  Ordinarily, this may not be a problem, and dual agency is in fact specifically authorized by Arizona law with the written consent of both parties. See A.A.C. R4-28-1101(F).  In some situations, however, an agent’s relationship presents an unwaivable conflict.

In this instance, and assuming the property is being purchased with sole and separate funds of the spouse and son (as opposed to community property of the husband and wife), the agent is not a direct party to the transaction.  However, the agent’s relationship with the buyers presents, at a minimum, the appearance of partiality. Additionally, while dual agency is permitted by Arizona law, judicial skepticism of this arrangement exists. See Marmis v. Solot Co., 117 Ariz. 499, 503, 573 P.2d 899, 903 (App.  1977). For these reasons, the agent should avoid representing the seller as a dual agent.

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