Contracts
Under Kentucky law, a purchase contract signed by a mentally incompetent person is:
AValid and fully enforceable
BVoid if the person has been legally adjudicated incompetent✓ Correct
CVoidable only if the other party knew of the incompetence
DValid if witnessed by two parties
Explanation
A contract signed by a person who has been legally declared incompetent by a court is void. If incompetency was not adjudicated, the contract may be voidable.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
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