A purchase agreement for a Sioux City property includes an inspection contingency allowing the buyer to request repairs or void the contract within 10 days of the inspection report. The buyer's inspector identifies a cracked foundation. The buyer submits a written repair request to the seller on day 8. The seller refuses all repairs. The buyer does nothing further. What is the most likely legal status of the purchase agreement?
Correct Answer
A) The contract remains enforceable and the buyer is obligated to proceed to closing because the buyer did not formally void the contract within the contingency period
An inspection contingency gives the buyer options — typically to request repairs, accept the property as-is, or void the contract — within a specified period. If the buyer submits a repair request but the seller refuses and the buyer fails to formally exercise the right to void the contract before the contingency deadline, the contingency expires. The buyer is then bound to proceed under the original contract terms. Silence or inaction after a seller's refusal does not automatically void the contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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