A closing-file reviewer in Huntersville is preparing an exam-prep note on due diligence fee, due diligence period, and Effective Date. Which statement best applies under current North Carolina law?
Correct Answer
A) A buyer may generally terminate for any reason or no reason before the end of the due diligence period, but the due diligence fee is still usually retained by the seller.
A buyer may generally terminate for any reason or no reason before the end of the due diligence period, but the due diligence fee is still usually retained by the seller.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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