A buyer purchases a property 'subject to finance' with a 14-day finance clause. On day 16, they attempt to withdraw due to loan rejection. What are their legal rights?
Correct Answer
C) They cannot rely on the finance clause, because its time limit has passed.
A finance clause lets the buyer end the contract only by giving notice within the stated period. After day 14 the buyer can no longer rely on it; depending on the contract, the condition is treated as satisfied or waived, or only the vendor keeps a right to terminate. If the buyer then fails to complete, they risk being in breach and losing the deposit. A buyer expecting a delay should ask the vendor to extend the finance date in writing before it passes.
Why This Is the Correct Answer
The finance clause gave the buyer a right to end the contract by notice within 14 days. Once that deadline passed without notice, the right lapsed, so a loan rejection on day 16 does not let the buyer withdraw under the clause.
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