‘Time for Acceptance’ a Self-Destruct Mechanism
By Joel Maxson
While many members believe the “Time for Acceptance” clause is the deadline for a party to respond, that belief isn’t quite correct. It’s more appropriate to think of it as a countdown to withdrawal, at which point the offer or counteroffer will be automatically taken off the table.
ORLANDO, Fla. – In both the T.V. and film versions of Mission Impossible, a spy would receive secret recorded instructions for a new mission that ended with the phrase “this message will self-destruct in five seconds.” Sure enough, the recording device would spark and smoke a few seconds later, leaving the top-secret mission instructions obliterated.
The clause in the Florida Realtors/Florida Bar contracts titled Time for Acceptance of Offer and Counteroffers sets up a situation very similar to the self-destructing recordings in Mission Impossible.
Here is the language from the contract:
If not signed by Buyer and Seller, and an executed copy delivered to all parties on or before [insert deadline] this offer shall be deemed withdrawn and the Deposit, if any, shall be returned to Buyer. Unless otherwise stated, time for acceptance of any counter-offers shall be within 2 days after the day the counter-offer is delivered.
And here are a few questions and answers that hopefully dispel a few misconceptions many people have about this clause.
Question 1: What does the word withdrawal mean?
Answer: Withdrawal is a legal concept that means someone is taking an offer or counteroffer “off the table.” The starting point is that whoever receives an offer or counteroffer is welcome to accept it, typically by signing and returning it. But if the other side withdraws the offer, then they can no longer accept it. They’re essentially back to the starting point where there isn’t a proposed contract on the table. Parties can withdraw an offer or counteroffer at any time by getting the message across to the other side, preferably sending a clear written message. This message must be delivered before the other side accepts for it to be effective.
Question 2: What does “deemed withdrawn” mean?
Answer: That’s the automatic self-destruct part. By placing a deadline in the contract, the offer or counteroffer will be withdrawn when time runs out. It has the same effect as if the person who submitted the offer or counteroffer sends a written message right as the deadline expires stating “I withdraw my offer.” Even if someone wants to accept after the deadline, they can’t. The best they could do is put something back on the table for the other side to consider.
Question 3: Does the deadline parties put in the blank (typically a calendar date) apply to counteroffers?
Answer: No. The deadline only applies to the initial offer. The second sentence clarifies that every counteroffer has its own new 2-day deadline, regardless of what date is placed in the blank.
Question 4: Does this clause obligate the party who receives an offer or counteroffer to respond by the deadline?
Answer: No.The parties are under no obligation to respond by the deadline.
Question 5: Is there a form available to fix a situation where both parties want to just agree to the terms of an offer or counteroffer after the automatic withdrawal deadline has passed?
Answer: No, there is not a form to help with this scenario. The parties would need to find a way to overcome this issue, which will likely require obtaining both parties’ signatures or initials to show that they agree to the terms that were previously withdrawn.
Question 6: Is a short deadline or a long deadline better?
Answer: It’s up to the party preparing the offer which they prefer, but here’s the right question to ask: At what point in time do I want my offer to self-destruct? Since we’ve noted that it can be a hassle to resolve this issue when the timeline is too short, parties may want to consider adding a reasonably long deadline under the circumstances. After all, if they change their mind for some reason, they still have the option of withdrawing the offer on their own before the automatic withdrawal deadline occurs.
Joel Maxson is Associate General Counsel for Florida Realtors
Reprinted with permission Florida Realtors. All rights reserved.