A Nevada purchase agreement includes a contingency stating that the contract is subject to the buyer obtaining financing within 21 days. The buyer is unable to secure a loan within that period and provides written notice to the seller. What is the most likely outcome under Nevada contract law?
Correct Answer
B) The buyer may cancel the contract and recover the earnest money if the contingency was properly drafted and timely invoked
A properly drafted financing contingency in a Nevada purchase agreement protects the buyer's right to cancel and recover earnest money if financing cannot be obtained within the specified timeframe. When the buyer provides timely written notice of inability to obtain financing, the contingency allows contract termination without penalty, and the earnest money is returned to the buyer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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