In a New York residential transaction, the purchase contract includes a provision stating 'This contract is subject to buyer's attorney approval within 5 business days.' The buyer's attorney is unavailable and cannot review the contract within this timeframe. What happens to the contract?
Correct Answer
C) The contract automatically becomes binding since the buyer failed to disapprove within the timeframe
In New York, attorney approval contingencies typically operate as 'approval' rather than 'disapproval' clauses, but when structured as shown, failure to disapprove within the specified timeframe results in the contingency being satisfied, making the contract binding on both parties.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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Previous Question
A New York purchase contract specifies that the buyer will receive a credit of $3,000 at closing for carpet replacement. After contract signing, the buyer discovers the carpets are in better condition than expected and requests to apply the credit toward other closing costs instead. The seller objects. Which statement is correct?
Next Question
A buyer in New York wants to include a home inspection contingency in their purchase offer. The inspection reveals minor cosmetic issues but no major defects. The buyer decides they no longer want the property and attempts to cancel based on the inspection contingency. Which statement is correct?