Sarah is purchasing a home in Louisville and signs a purchase agreement with the seller. The agreement includes a purchase price, a legal description of the property, and signatures of both parties, but Sarah has not yet paid the earnest money deposit. Under Kentucky law, is this contract enforceable at the time of signing?
Correct Answer
C) Yes, because the mutual promises of buyer and seller constitute sufficient consideration
In Kentucky, a real estate purchase agreement is a bilateral contract in which the mutual promises of the buyer and seller serve as consideration for each other. The buyer's promise to purchase and the seller's promise to sell are legally sufficient consideration to make the contract binding upon signing, even before earnest money is paid.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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