FACTS: The seller signed a listing agreement electronically. Included in the listing paperwork was the Arizona REALTORS® HOA Condominium/Planned Community Addendum (the “Addendum”). The seller and listing agent were not aware that the electronic signing program populated a signature on page 3 of the Addendum indicating “SELLER’S ACCEPTANCE.”

The Addendum was subsequently placed on the MLS under the documents tab.

When a buyer submitted an offer to the seller, he indicated on the Addendum that the seller would be responsible for paying all fees negotiable on the Addendum, and that the seller was bound to pay all of those fees because the seller already had signed it.

ISSUE: Is the seller obligated to pay all HOA fees because he signed the Addendum prior to the offer?

ANSWER: No.

DISCUSSION:         

For a valid contract to have been formed between the parties, there must have been an offer, acceptance of the offer, and consideration. K–Line Builders, Inc. v. First Fed. Sav. & Loan Ass’n, 139 Ariz. 209, 212, 677 P.2d 1317, 1320 (App. 1983). Additionally, the parties must have intended to be bound by the agreement. Goodman v. Physical Res. Eng’g, Inc., 229 Ariz. 25, 270 P.3d 852 (App. 2011).

Thus, an offer has no binding effect unless and until accepted by the offeree to whom the offer was directed. AROK Constr. Co. v. Indian Constr. Servs., 174 Ariz. 291, 294, 848 P.2d 870, 873 (App. 1993).

In this case, buyer sent an offer to seller, attached to which was the Addendum. By way of that Addendum, buyer conveyed an offer proposing which party would pay certain HOA fees. The seller could not have accepted the offer before having received it. As such, seller did not accept the terms contained within the HOA Addendum and seller may now accept or reject the offer.