During negotiations for a home in Covington, Kentucky, the seller's agent presents a written counteroffer that changes the purchase price from $285,000 to $295,000 and extends the closing date by two weeks. The buyer verbally agrees to the new price but wants the original closing date. The buyer's agent communicates this verbally to the seller's agent. Under Kentucky law, what is the status of the transaction?
Correct Answer
C) No binding contract exists because the buyer's response constitutes a new counteroffer that must be in writing
Under Kentucky contract law, an acceptance must be a mirror image of the offer — it must accept all terms without modification. When the buyer agreed to the new price but rejected the extended closing date, the buyer's response was not a true acceptance but rather a counteroffer. Additionally, under Kentucky's Statute of Frauds (KRS 371.010), any modification to a real estate contract must be in writing to be enforceable. The buyer's verbal communication does not create a binding contract.
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Related Topics & Key Terms
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Related Concepts
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.
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.
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