On September 27, Summers sent Fox a letter offering to sell Fox a vacation home for $150,000. On October 2, Fox replied by mail agreeing to buy the home for $145,000. Summers did not reply to Fox. Do Fox and Summers have a binding contract?
a. No, because Fox failed to sign and return Summers’ letter.
b. No, because Fox’s letter was a counteroffer.
c. Yes, because Summers’ offer was validly accepted.
d. Yes, because Summers’ silence is an implied acceptance of Fox’s letter.
Answer：B
Common law applies to this contract because it involves real estate. In this situation, Fox’s reply on October 2 is a counteroffer and terminates Summers’ original offer made on September 27. The acceptance of an offer must conform exactly to the terms of the offer under common law. By agreeing to purchase the vacation home at a price different from the original offer, Fox is rejecting Summers’ offer and is making a counteroffer.
Answer (a) is incorrect because the fact that Fox failed to return Summers’ letter is irrelevant to the formation of a binding contract. Fox’s reply constitutes a counteroffer as Fox did not intend to accept Summers’ original offer.
Answer (c) is incorrect because Summers’ offer was rejected by Fox’s counteroffer.
Answer (d) is incorrect because with rare exceptions, silence does not constitute acceptance.