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Key Takeaways

  • Kentucky follows the Statute of Frauds requiring real estate contracts to be in writing and signed
  • Essential contract elements include: parties, property description, price, terms, and signatures
  • Kentucky uses standard purchase agreement forms provided by the Kentucky Association of REALTORS
  • Earnest money deposits are not legally required but customary in Kentucky transactions
  • Time is generally of the essence in Kentucky real estate contracts unless stated otherwise
Last updated: January 2026

Kentucky Contract Requirements

Real estate contracts in Kentucky must comply with state law requirements, including the Statute of Frauds.

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Statute of Frauds

The Statute of Frauds requires certain contracts to be in writing to be enforceable:

Must Be WrittenDescription
Contracts for sale of real estatePurchase agreements
Leases over one yearLong-term rental agreements
Listing agreementsTo earn commission
Contracts not to be performed within one yearExtended agreements

Requirements for Written Contracts

To satisfy the Statute of Frauds, contracts must:

  • Be in writing
  • Identify the parties
  • Describe the property
  • State the essential terms
  • Be signed by the party to be charged

Essential Contract Elements

Required for Valid Contract

ElementDescription
Competent partiesLegal capacity to contract
Offer and acceptanceMeeting of the minds
ConsiderationSomething of value exchanged
Legal purposeLawful objective
Proper formWriting and signature

Kentucky-Specific Requirements

RequirementDetails
Property descriptionLegal description or sufficient identification
Purchase priceSpecific amount or method to determine
Closing dateSpecified or "on or before" date
SignaturesBuyers, sellers, and broker acknowledgment

Standard Contract Forms

Kentucky Association of REALTORS (KAR) Forms

Kentucky real estate professionals commonly use KAR standard forms:

FormPurpose
Purchase AgreementMain contract for property sale
Counter OfferResponse to offer with changes
AddendumAdditional terms or modifications
AmendmentChanges to existing contract

Note: These forms are provided by KAR for member use. Licensees should not draft custom contract language—that may constitute unauthorized practice of law.

Key Contract Sections

SectionContent
PartiesBuyer and seller names
PropertyAddress, legal description
Price and termsPurchase price, financing
Earnest moneyAmount, holder, disposition
InspectionsContingencies and timeframes
ClosingDate, location, costs
PossessionWhen buyer takes occupancy

Earnest Money

Purpose of Earnest Money

Earnest money demonstrates the buyer's good faith intention to complete the purchase:

AspectDetails
RequiredNot legally required, but customary
AmountNegotiable, typically 1-3% of price
HolderUsually broker's trust account or title company
PurposeShows buyer's serious intent

Disposition of Earnest Money

ScenarioEarnest Money
Transaction closesApplied to purchase price
Buyer defaultsMay be retained by seller as damages
Seller defaultsReturned to buyer
Contract terminated properlyReturned to buyer
DisputeHeld until resolution

Time is of the Essence

What It Means

"Time is of the essence" means:

  • Deadlines are strict and binding
  • Failure to meet deadline may allow termination
  • Extensions require written agreement
  • Late performance is a breach

Kentucky Practice

AspectApplication
Contract datesGenerally strictly enforced
ExtensionsMust be in writing
Contingency deadlinesTypically time is of the essence
Closing dateUsually allows reasonable delay
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Essential Contract Elements
Test Your Knowledge

Under the Kentucky Statute of Frauds, which contracts must be in writing to be enforceable?

A
B
C
D
Test Your Knowledge

In Kentucky, earnest money is:

A
B
C
D
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