A purchase agreement in Louisville, Kentucky is signed by both parties. The seller is 17 years old and has not been legally emancipated. Three weeks after signing, the seller's parents discover the agreement and the seller disaffirms the contract. The buyer, who was unaware of the seller's age, demands the return of the $4,000 earnest money and performance of the contract. Under Kentucky law, what is the most accurate statement about this situation?
Correct Answer
B) The contract is voidable at the minor's option, and upon disaffirmance the buyer is entitled to return of earnest money but not specific performance
Under Kentucky law, a contract entered into by a minor (a person under 18 years of age) is voidable at the minor's option, not void. This means the minor can choose to disaffirm (cancel) the contract or ratify it upon reaching majority. When the minor disaffirms, the contract is unwound: the minor must return any consideration received, and the other party is entitled to the return of their earnest money. However, because the contract is voidable (not void), the buyer cannot compel specific performance once the minor has disaffirmed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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