A buyer in West Hartford, Connecticut includes a home sale contingency in her purchase offer, giving her 60 days to sell her existing home. The seller accepts but also inserts a kick-out clause allowing a 48-hour notice period. After 30 days, the seller receives a competing cash offer. The seller sends the buyer written notice invoking the kick-out clause. The buyer responds within 48 hours stating she is waiving the home sale contingency and will proceed unconditionally. What is the legal effect of the buyer's response?
Correct Answer
B) The buyer's waiver within the 48-hour window removes the home sale contingency, and the original contract remains binding on both parties
The purpose of the kick-out clause is to give the seller leverage to accept a better offer, but it also gives the first buyer an opportunity to save the deal by removing the problematic contingency. When the buyer responds within the contractually specified 48-hour window and waives the home sale contingency, the original purchase contract becomes unconditional and binding. The seller is no longer free to accept the competing offer, because the buyer timely exercised her right under the kick-out clause to remove the contingency.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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