(1) The case involved a potential real estate buyer, Normile, who submitted an offer that was rejected by the seller, Miller, through a counteroffer. (2) Normile did not accept or reject Miller's counteroffer before the property was sold to another buyer. (3) The court held that once Miller revoked the counteroffer by selling the property to another, Normile no longer had the power to accept the terms, and thus there was no enforceable contract between the two parties.
(1) The case involved a potential real estate buyer, Normile, who submitted an offer that was rejected by the seller, Miller, through a counteroffer. (2) Normile did not accept or reject Miller's counteroffer before the property was sold to another buyer. (3) The court held that once Miller revoked the counteroffer by selling the property to another, Normile no longer had the power to accept the terms, and thus there was no enforceable contract between the two parties.
(1) The case involved a potential real estate buyer, Normile, who submitted an offer that was rejected by the seller, Miller, through a counteroffer. (2) Normile did not accept or reject Miller's counteroffer before the property was sold to another buyer. (3) The court held that once Miller revoked the counteroffer by selling the property to another, Normile no longer had the power to accept the terms, and thus there was no enforceable contract between the two parties.
Title and Citation: Normile v. Miller, 326 S.E.2d. 11 (1985) *
IMPORTANT CASE * Identities of Parties: D (Hazel Miller) was selling real estate in NC; P (Normile and Kurniawan) was a potential buyer and P (Segal) the actual buyer. Procedural History: The Ps separate suits but were consolidation into one. The trial court granted Segals motion for summary judgment and P (Normile and Kurniawan) appealed decision to Court of Appeals for courts denial of their motion for summary judgment. Court of Appeals affirmed decision, P (Normile) appealed to the Supreme Court of North Carolina. Facts: August 4, D listed a piece of real estate in Charlotte, NC. P (Normile) saw the property through a real estate broke, after seeing the property they prepared an offer. The offer specified that it must be accepted by August 5 at 5pm. D received the offered and made several changes before signing it and returning the offer to P. When the broker gave the counteroffer to P, the P did not accept or reject the offer, just said he would wait before deciding what to do. The real estate broker thought that the P would reject the offer because he indicated that the increase in the earnest money and decreased of the loan were challenging. On August 5 Segal (P) at 12:30am signed an offer to purchase the property from the D with the terms very similar to D counteroffer. The D accepted the offer from (P) Segal. Then at around 2pm the real estate broker told the P (Normile) that the counteroffer has been revoked you snooze, you lose; the property has been sold. Before 5pm P (Normile) signed the D counteroffer and delivered it with the earnest money deposit. Issue(s): (A) If a seller rejects original offers but makes a counteroffer that is not accepted by the prospective buyer, does the prospective buyer have the power to accept the counteroffer after it has been revoked? Can an offeree (P) enforce a contract to buy property when he did not accept the counteroffer to buy until after the offer been revoked? (B) Did the P accept or reject D counteroffer?
Holding and Rule: (A) No, a prospective buyer cannot enforce a
contract to buy property when he did not accept the offer until after it has been revoked. (B) P manifest no intent on signing the offer, he did accept or reject the offer.
Courts Reasoning: No. An offer to purchase is the offer by a
purchaser to buy real estate. If the offer to purchase contains a clause stipulating a certain period of time in which the offer must be accepted, the offer will automatically expire at that specified time if it has not been accepted. If the offeree responds to an offer by changing the terms of the offer or adding new ones, then the original offer is rejected and a counter-offer is made. An offer is freely revocable until accepted or rejected by the offeree. Notice of revocation may be communicated directly or indirectly. Indirect communication exists when the offeree has reliable direct or indirect information that the offeror has taken definite action inconsistent with an intention to enter into a contract. An option contract is irrevocable for an agreed-upon time limit. An option contract is created when a property owner gives, in exchange for valuable consideration, another the exclusive right to buy property at a fixed price within a specified period of time. In the current matter, Miller did not accept P (Normiles) offer, but made a counteroffer by changing material terms of the original offer. The most notable change was that regarding payment of the purchase price. Additionally, Millers counteroffer did not create an option contract. There is no indication in the language of the counteroffer that Miller would agree to sell the property at a fixed price within a certain period of time. Even though Millers counteroffer technically included a time limit of the original offer, the time limit cannot be included in the terms of Millers counteroffer. The effect of Millers counteroffer was to completely reject all the terms of P (Normiles) offer, including the time limit. The terms of Millers counteroffer did not include a time limit and, therefore, did not create an option contract. Therefore, Normile must have accepted Millers counteroffer before she revoked it. Normile neither accepted nor rejected Millers counteroffer. Normile told Byer that he was going to wait and consider the counteroffer. He waited too long and the property was sold to another purchaser. Miller effectively communicated her revocation of the offer when Byer informed Normile that the property had been sold. Normiles attempts, later that same day, to accept the counteroffer were futile since he had no power of acceptance at that time. Accordingly, because Normile failed to accept the counteroffer before valid revocation, Miller and Normile did not enter into a binding contract. Judgment and Order: The decision of the trial court is affirmed. Main rules of formation