Contracts
In Kentucky, a 'subject to' clause in a purchase contract typically means the contract is:
AVoided by the condition mentioned
BContingent on the specified condition being met✓ Correct
CImmediately binding regardless of the condition
DSubject to KREC approval
Explanation
A 'subject to' clause creates a contingency — the contract is binding but the obligation to perform is contingent upon the specified condition being met (such as obtaining financing, buyer's home selling, etc.).
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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