A buyer and seller have entered into a binding Maryland residential sales contract. Which of the following would NOT automatically terminate the contract?
Correct Answer
D) The buyer's discovery of a material defect during the home inspection period
The discovery of a material defect during the home inspection period does NOT automatically terminate a Maryland real estate contract. A home inspection contingency typically gives the buyer the option to request repairs, accept the property as-is, or void the contract — but the buyer must take affirmative action within the specified period. Discovery of a defect alone does not automatically void the contract; the buyer must exercise their contractual rights within the time frame provided. If the buyer takes no action, the contingency may be deemed waived.
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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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