A Montana listing agent is reviewing a buyer's offer on a residential property. All of the following conditions would allow the buyer to cancel the purchase agreement and recover their earnest money EXCEPT:
Correct Answer
C) The buyer simply changed their mind about purchasing the property after all contingencies were removed
A buyer who simply changes their mind after all contingencies have been removed and waived has no contractual basis to cancel the purchase agreement and recover earnest money. At that point, the buyer is in a fully binding contract without contingency protection. Canceling without a valid contractual reason constitutes breach, and the seller is typically entitled to retain the earnest money as liquidated damages under the purchase agreement.
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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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