In a Florida real estate transaction, the purchase agreement includes a mortgage contingency clause. The buyer receives a loan commitment letter with an interest rate 0.5% higher than specified in the contract. What are the buyer's rights?
Correct Answer
B) The buyer can cancel and receive a full refund of deposits
Correct: B - If the financing terms don't match those specified in the contingency clause, the buyer can cancel the contract and receive a full refund of deposits. Why not A: The buyer is not obligated to accept terms different from those specified. Why not C: There's no requirement to negotiate; the buyer can simply cancel. Why not D: The buyer doesn't forfeit deposits when the contingency isn't met.
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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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- → A Florida real estate licensee prepares a purchase agreement that includes a financing contingency. The buyer fails to apply for financing within the specified timeframe. What is the legal consequence under Florida contract law?
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Previous Question
A buyer signs a Florida residential purchase agreement but includes 'Subject to my attorney's approval within 5 days' next to their signature. The seller signs without addressing this addition. What is the status of this contract?
Next Question
Under Florida law, all of the following would make a real estate purchase agreement voidable EXCEPT: