A seller in Framingham, Massachusetts lists their home for $595,000. A buyer submits a written offer for $580,000. The seller counters at $590,000, and the buyer accepts in writing. The fully executed contract includes a clause stating: 'This agreement is contingent upon the buyer's attorney approving the title within 10 business days.' The buyer's attorney finds a cloud on the title and notifies the seller within the 10-day period. The seller argues the contract is still binding because the buyer must proceed regardless. Under Massachusetts law, which statement best describes the legal effect of the attorney approval contingency?
Correct Answer
A) The contingency is a valid condition precedent, and the buyer may void the contract if the attorney does not approve the title within the stated period
An attorney approval contingency (also called an attorney review clause) is a recognized and enforceable condition precedent in Massachusetts real estate contracts. It gives the buyer's (and sometimes the seller's) attorney a specified period to review and approve the contract terms, title, or other matters. If the attorney does not approve within the stated period — for example, because of a cloud on the title — the buyer has the right to void the contract. The seller's argument that the buyer must proceed regardless is incorrect; the contingency is a valid contractual right.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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.
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