Kevin agreed to purchase a home in Bergen County contingent on selling his current home in Essex County within 45 days. After 30 days, Kevin has not found a buyer for his current home. The seller, Patricia, wants to continue marketing her property. Under standard New Jersey contract practice, what clause would allow Patricia to accept another offer while keeping Kevin's contract in place?
Correct Answer
A) A kick-out clause allowing Patricia to accept a new offer and give Kevin a set period to waive the home-sale contingency
A kick-out clause (also called a release clause or bump clause) is commonly used in New Jersey residential contracts when a buyer's offer is contingent on selling an existing home. The clause allows the seller to continue marketing the property and, upon receiving a bona fide second offer, to notify the first buyer and give them a specified period (typically 48 to 72 hours in NJ practice) to either waive the home-sale contingency and proceed with the purchase or release the contract. This protects the seller from being locked into an indefinite wait.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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Specific performance in North Dakota:
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