A purchase and sales agreement for a lakefront property in Meredith, New Hampshire includes a contingency stating the sale is subject to the buyer obtaining satisfactory results from a well water quality test within 14 days. The test reveals elevated arsenic levels. The buyer notifies the seller in writing within the contingency period. What is the most likely outcome under the terms of a properly written NH purchase agreement?
Correct Answer
B) The buyer may terminate the agreement and receive a full refund of the earnest money deposit.
When a purchase agreement contains a properly written water quality contingency and the test results are unsatisfactory (such as elevated arsenic levels), the buyer has the contractual right to terminate the agreement and recover the earnest money deposit in full, provided the buyer notifies the seller within the contingency period. This is consistent with NH practice where private well testing is a standard and important contingency given the prevalence of private wells in the state.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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