Under Connecticut real estate practice, a mortgage contingency clause in a purchase and sale agreement primarily protects which party?
Correct Answer
A) The buyer, allowing contract termination if financing cannot be obtained
A mortgage contingency clause protects the buyer by allowing them to terminate the purchase contract and recover their earnest money deposit if they are unable to obtain financing on the terms specified in the contingency. This is a standard protective provision in Connecticut residential purchase and sale agreements.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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