A New York purchase contract includes the provision: 'Buyer to assume seller's existing mortgage of approximately $180,000.' At closing, the actual mortgage balance is $186,500. The buyer objects to the higher amount. Which statement is most accurate?
Correct Answer
B) The buyer must accept the higher amount since 'approximately' allows for reasonable variance
The word 'approximately' in the contract indicates that both parties anticipated some variance in the actual mortgage balance. A difference of $6,500 on a $180,000 mortgage (about 3.6%) would generally be considered within reasonable variance for an 'approximate' amount.
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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 buyer in New York wants to include a clause allowing them to cancel the contract if they cannot sell their current home within 45 days. This type of provision is commonly known as a:
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In New York, when a real estate purchase contract is signed by both parties, but before any contingencies are satisfied or removed, the contract is considered: