James and Carol enter into a purchase agreement for a home in Teaneck, New Jersey. The contract contains an inspection contingency giving James 10 days to conduct a home inspection. On day 9, the inspector finds significant structural damage. James notifies the seller in writing that he is voiding the contract based on the inspection contingency. The seller argues that James must instead negotiate repairs. Which of the following is most accurate under New Jersey contract law?
Correct Answer
D) James may void the contract and recover his deposit because he properly exercised the inspection contingency within the specified period
Under New Jersey contract law, when a purchase agreement contains a clearly written inspection contingency, the buyer has the contractual right to void the contract within the specified period if the inspection reveals unsatisfactory conditions. James properly exercised this right on day 9 of a 10-day window, provided written notice, and is entitled to a full refund of his deposit. The seller cannot compel negotiation when the contract gives the buyer a unilateral right to void.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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.
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