Under Michigan law, which of the following is NOT a valid ground for a buyer to rescind a residential purchase agreement without penalty?
Correct Answer
C) The buyer simply changed their mind about purchasing the property after all contingencies were removed
Option C is NOT a valid ground for penalty-free rescission under Michigan law. Once all contingencies in a purchase agreement have been removed or waived, a buyer who simply changes their mind and wants to back out has no statutory or contractual right to rescind without penalty. The buyer would be in breach of contract, and the seller would be entitled to remedies such as retaining the earnest money (if a liquidated damages clause exists) or pursuing compensatory damages or specific performance.
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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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