A buyer in Texas enters into a contract with the Third Party Financing Addendum specifying a maximum origination fee of 1% and maximum interest rate of 6.5%. The lender offers the buyer a rate of 6.25% but with an origination fee of 2%. Under the addendum, the buyer:
Correct Answer
B) May terminate because the origination fee exceeds the maximum specified in the addendum
The Third Party Financing Addendum specifies both maximum interest rate and maximum origination fee. If any term exceeds the specified maximum, the buyer may terminate because the financing does not meet the agreed-upon terms. Each term is evaluated independently.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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.
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