A buyer in Bowling Green offers $250,000 for a home. The seller responds in writing, agreeing to sell but changing the price to $260,000 and the closing date by two weeks. The buyer then verbally tells the seller's agent he accepts the $260,000 price but wants the original closing date. Under Kentucky contract law, what is the current status of negotiations?
Correct Answer
C) The seller's written response was a counteroffer that rejected the original offer, and the buyer's verbal response is a new counteroffer that is unenforceable without a written, signed agreement
Under Kentucky contract law, a counteroffer that changes any material term — here, both price and closing date — constitutes a rejection of the original offer and a new offer. The seller's written response was therefore a counteroffer. The buyer's verbal response accepting only part of the counteroffer's terms (the price but not the closing date) is itself a new counteroffer. Because real estate contracts must be in writing under KRS 371.010, this verbal response is unenforceable. No binding contract yet exists.
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Related Topics & Key Terms
Key Terms:
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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