A North Carolina buyer paid a $1,500.00 due diligence fee to the seller and placed $7,500.00 earnest money in escrow. Assume the buyer breaches after the due diligence period and no separate written release or court order has yet changed the contract result. Under that assumption, how much of those two deposits the buyer automatically receives?
Correct Answer
C) $0.00
Use the stated North Carolina formula or contract assumption: After buyer breach outside an ordinary due diligence termination, the buyer does not automatically receive either deposit simply because the buyer wants out.. That calculation produces the correct amount.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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