Contracts
A Missouri real estate contract that is 'voidable' means:
AIt is automatically invalid
BOne or more parties have the legal right to cancel it due to a defect (such as fraud or misrepresentation)✓ Correct
CBoth parties can cancel for any reason
DThe contract needs MREC approval to be valid
Explanation
A voidable contract in Missouri is one that is valid and binding unless the aggrieved party (such as a minor or a party who was defrauded) chooses to void it. Unlike a void contract, a voidable contract can be ratified.
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Key Terms to Know
Purchase Agreement
A 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.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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