During a brokerage meeting in Aurora, Sawyer Diaz asks what a financing contingency is designed to do in a residential Illinois contract. What is the best answer under current Illinois law or practice?
Correct Answer
B) A financing contingency generally makes the buyer's duty to close contingent on obtaining the stated financing under the contract terms.
The financing contingency ties performance to the buyer obtaining the contractually described financing, not to seller financing or automatic waiver of other terms.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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