Under Minnesota law and standard purchase agreement practice, which of the following is NOT a valid basis for a buyer to rescind a residential purchase agreement before closing?
Correct Answer
C) The buyer changed their mind about the purchase after completing all due diligence and finding no defects, with no contingencies remaining in the contract
Simply changing one's mind — 'buyer's remorse' — after completing all due diligence and with no remaining contingencies is NOT a valid legal basis to rescind a purchase agreement in Minnesota. Once all contingencies have been satisfied or waived and the buyer has completed due diligence, the purchase agreement is a binding contract. A buyer who refuses to close without a valid legal justification is in breach of contract, not exercising a right of rescission. There must be a legal basis (unfulfilled contingency, statutory rescission right, fraud, material non-disclosure) to rescind.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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