In real estate law, normally the buyer is the one who makes an offer by presenting an earnest money contract. However, sometimes it is the seller who makes an offer to sell his property at a certain price. Or, at least, it may seem that he has made a legally binding offer.

In 1932, in the case of Owen v. Tunison, the prospective buyer contacted a certain commercial property owner and asked him if he would sell the property for $6000.00.  The owner replied,, “It would not be possible for me to sell the property unless I were to receive $16,000.00 for it.” The interested buyer then replied, “Sold! I’ll pay you $16,000.00 for it.” However, the owner of the property said he would have to think about it for awhile. After thinking it over, he contacted the buyer and told him that he had decided not to sell the property.

The prospective buyer then hired a good attorney and took the property owner to court. His lawyer argued that the owner had made an offer to sell the property and that he, the buyer, had accepted it. Therefore, the lawyer argued, there was a binding contract.

It is true that under real estate law, if there is an offer and an acceptance, then there is a contract.  But the question is this case was: Had the owner truly made an offer to sell.  The court ruled that there was no contract. It explained that the owner never made an offer to sell his property for $16,000.00.  Instead, he was merely stating that he wouldn’t consider any offers for less than $16,000.00.  In effect, he was inviting the prospective buyer to make an offer.  He was not making an offer himself. Therefore, there was no legally binding contract. Even though this case is from 1932, it is still the rule of law.