A buyer and seller in Frankfort, Kentucky sign a purchase agreement on March 1. The agreement states that the offer will expire at 5:00 PM on March 3 unless the seller signs and delivers acceptance to the buyer. On March 3 at 4:45 PM, the seller signs the agreement but the buyer's agent does not receive it until March 4 at 9:00 AM. Under Kentucky contract law, when was a valid contract formed?
Correct Answer
A) No valid contract was formed because acceptance was not communicated before the deadline
Under Kentucky contract law, an offer that specifies a deadline for acceptance requires that acceptance be communicated to the offeror (or their agent) before the deadline expires. The seller signed at 4:45 PM, which was within the deadline, but the acceptance was not delivered to the buyer's agent until March 4, after the 5:00 PM March 3 deadline. Because the offeror set a specific deadline and the acceptance was not communicated within that time, the offer expired and no valid contract was formed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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