Under the TREC Addendum for Back-Up Contract, the back-up buyer has the right to terminate before the first contract fails. If the back-up buyer decides to terminate while still in back-up position, what happens to the back-up buyer's earnest money?
Correct Answer
A) The earnest money is returned to the back-up buyer upon proper termination
Under the TREC Addendum for Back-Up Contract, the back-up buyer has the right to terminate the back-up contract at any time before it becomes the primary contract. Upon proper termination, the earnest money is returned to the buyer.
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Related Concepts
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.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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