A seller in Stamford, Connecticut accepts an offer that includes a home sale contingency, giving the buyer 45 days to sell their existing Bridgeport home. The seller's agent advises the seller to include a kick-out clause. The seller agrees. Three weeks later, the seller receives a second, stronger offer with no contingencies. What does the kick-out clause allow the seller to do?
Correct Answer
D) Notify the first buyer that they must waive the home sale contingency or remove it within a specified period, or the seller may accept the second offer
A kick-out clause (also called a release clause or escape clause) allows the seller to continue marketing the property after accepting an offer with a home sale contingency. When a better offer arrives, the seller notifies the first buyer, who then has a specified period (commonly 24–72 hours as set in the contract) to either waive the home sale contingency and proceed unconditionally, or allow the seller to terminate the first contract and accept the second offer.
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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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