A buyer in Pontiac submits an offer on a home and the seller accepts. The purchase agreement includes a 10-day inspection contingency. The buyer's inspector identifies several defects, and the buyer submits a repair request addendum asking the seller to fix all items. The seller refuses to make any repairs. Under Michigan contract law, what options does the buyer most likely have?
Correct Answer
B) The buyer may cancel the contract and receive a return of earnest money, or waive the contingency and proceed
Under a standard Michigan purchase agreement with an inspection contingency, if the parties cannot reach agreement on repairs within the contingency period, the buyer typically has the right to cancel the contract and receive a return of earnest money, or alternatively waive the contingency and proceed with the purchase as-is. The inspection contingency is designed to protect the buyer, and the seller's refusal to negotiate does not compel the buyer to proceed. The buyer retains the right to cancel if the contingency terms are not satisfied.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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.
More Contracts Questions
Which of the following is required for a valid contract in California?
An “as is” clause in a general purchase contract:
A contract formed for an illegal purpose is considered:
After a residential purchase contract has been signed by both parties in Illinois, the buyer and seller verbally agree to change the closing date. What is the legally sound way to document this change?
Specific performance in North Dakota:
- → In a contract for deed (land contract), who retains legal title to the property until the purchase price is fully paid?
- → Which of the following is NOT required for a valid bill of sale?
- → A Nevada real estate salesperson is helping a buyer draft a purchase agreement. Which of the following is NOT a required element for a Nevada residential purchase agreement to be legally enforceable?
- → Sawyer Iverson is reviewing an Illinois issue in Joliet. The person assumes that attorney review automatically replaces every inspection, appraisal, or financing deadline in a standard Illinois residential contract. Which statement best applies?
- → Tom and Linda sign a purchase agreement for a home in Hartford, Connecticut. The agreement includes a financing contingency stating that if Tom cannot obtain a mortgage commitment within 21 days, either party may void the contract. On day 19, Tom's lender issues a written mortgage commitment. On day 22, Tom changes his mind and tries to void the contract by claiming the financing contingency was not satisfied. Which of the following best describes the legal status of the contract?
- → Avery Jenkins is reviewing an Illinois issue in Normal. The person asks what happens if neither attorney sends a disapproval or proposed change during the standard review period. Which statement best applies?
- → Under Montana law, a purchase agreement for residential real property becomes legally binding on the seller when which of the following occurs?
- → Johnny wants the seller's patio furniture included in his purchase of a house. Before the offer is signed and delivered to the seller, he asks his agent to attach a page covering the furniture to the offer. That attached page is best described as:
- → A bilateral contract in real estate is best described as:
- → A contract where one party uses threats to force the other party to sign is considered:
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