Contracts
In New Mexico, which of the following would make a purchase agreement 'voidable' rather than 'void'?
AThe contract was for an illegal purpose
BOne party lacked contractual capacity (was a minor or mentally impaired) at the time of signing✓ Correct
CConsideration was absent
DThe subject matter was impossible to perform
Explanation
A contract is voidable when it was entered into by a party lacking full legal capacity (minor, incompetent) — only that party can disaffirm it. Contracts for illegal purposes, without consideration, or for impossible subjects are void from inception.
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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.
Earnest MoneyA 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.
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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