Offer Withdrawal
How much flexibility does a buyer have in regards to withdrawing an offer/counter offer before it being accepted by the seller? Assuming form 100 is used and signed under seal.
Answer:
While it is indeed proposed that the Offer be irrevocable, the only “obligation” that arises is if the Offer (or counter Offer) were executed under seal. The reason is that there is no consideration flowing for the promise of irrevocability. So, instead of an enforceable promise, it is merely a gratuitous offering which might be withdrawn before acceptance. Hence, the seal is the solution. That makes the Offer irrevocable right up to the time limit.
The next issue in this process is “delivery”. If a party signs an Offer, even under seal, as long as it remains with that party or their Agent, then it may be revoked. This is also the case where the Agent has phoned and said “I’m bringing you an Offer”. The party can still call their own Agent while enroute and say “I’ve had second thoughts, do not proceed”.
Once delivery has taken place, the Offer may not be withdrawn. Delivery means that the Offer has been transferred into the possession of the other side. So, the Offeree has it personally or their Agent has it on their behalf. The Offer could be received by fax, e-mail, or hard copy, but it’s now in the possession of the Offeree.
Sometimes, the Offeror truly wants to be able to “pull their Offer” as a negotiating item. In that case, the standard Form Agreement needs to be amended and the seal removed. That’s difficult because it is printed into the Form. It could be crossed out with an “X”, initialed, with the words “not under seal” added, and with the addition of the statement in Schedule A, “this Agreement is not executed under seal”. That procedure should be sufficient for removal of the seal.
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