FACTS: A buyer presents an offer to the seller on the Arizona REALTORS® Residential Real Estate Purchase Contract (the “Contract”). The seller wishes to counter the purchase price and the inspection period. The listing agent counters the purchase price on Counter-Offer #1, stating: “The purchase price shall be $200,0000. All other terms and conditions remain the same.” However, the listing agent also marked altered Section 6a of the Contract, by crossing out ten (10) days and indicating the inspection period of five (5) days.

ISSUE: In the seller’s Counter-Offer, should the listing agent have written, “All other terms and conditions remain the same” if the seller countered additional terms within the Contract?

ANSWER: Probably not

DISCUSSION:

Before a binding contract is formed, parties must mutually consent to all material terms. Hill-Shafer Partnership v. Chilson Family Trust, 165 Ariz. 469, 799 P.2d 810 (1979).

Oftentimes, disputes arise because ambiguity has occurred. Here, the Counter-Offer language is ambiguous within the “four corners” of the document because it can be reasonably interpreted in more than one way. To avoid ambiguity, the listing agent should have countered all Contract terms on the Counter-Offer, and then used “all other terms and conditions remain the same.” This would indicate that the seller has placed in the Counter-Offer only those terms she wished to change and any item(s) not specifically negotiated in the Counter-Offer remain and are agreed upon between the two parties.