Maria signs a purchase and sale agreement to buy a home in Hartford, Connecticut. The contract includes a home inspection contingency with a 10-day inspection period. On day 8, the inspector discovers significant foundation cracks. Maria notifies the seller in writing that she is exercising the contingency and terminating the contract. What is the most likely outcome under Connecticut contract law?
Correct Answer
A) Maria is entitled to a refund of her earnest money deposit because she properly exercised the contingency within the specified period
When a buyer properly exercises a contingency within the contractually specified period — here, day 8 of a 10-day window — the contract is terminated according to its terms and the buyer is entitled to a full refund of the earnest money deposit. Maria followed the proper procedure by providing written notice within the contingency period.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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