Maria signs a CREC-approved Contract to Buy and Sell Real Estate with a loan contingency. Her lender denies her mortgage application before the loan contingency deadline. What is Maria's most likely right under the Colorado contract?
Correct Answer
D) Maria may terminate the contract and receive a refund of her earnest money
Under the CREC-approved Contract to Buy and Sell Real Estate, if the buyer's loan contingency is not satisfied — meaning the buyer cannot obtain the specified financing — the buyer has the right to terminate the contract before the contingency deadline and receive a full refund of earnest money. This is the core protection that the loan contingency provides under Colorado's standardized contract forms.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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