Under Tennessee real estate practice, which of the following best describes an 'inspection contingency' in a residential purchase contract?
Correct Answer
A) A clause allowing the buyer to terminate the contract or negotiate repairs if the inspection reveals unsatisfactory conditions
An inspection contingency in Tennessee gives the buyer the right to have the property professionally inspected within a specified period. If the inspection reveals unsatisfactory conditions, the buyer may terminate the contract and recover earnest money, or negotiate with the seller for repairs or a price reduction. This contingency is distinct from the seller's disclosure obligations under Tenn. Code Ann. § 66-5-201 et seq.
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Related Topics & Key Terms
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Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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.
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