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.
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