A Maryland buyer properly invokes a home inspection contingency and voids the contract within the contingency period. Which of the following is NOT a likely consequence of properly voiding the contract under the inspection contingency?
Correct Answer
C) The buyer forfeits the earnest money deposit as a penalty for voiding the contract
When a buyer properly invokes a home inspection contingency within the contingency period, the buyer does NOT forfeit their earnest money deposit. Forfeiture of earnest money is a consequence of breaching a contract, not of properly exercising a valid contingency. The earnest money should be returned to the buyer in full upon proper invocation of the contingency.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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