Buyer Chen enters into a TREC contract with a 10-day option period. On Day 11, Chen's inspector discovers significant mold damage. Chen wants to terminate the contract. What are Chen's options?
Correct Answer
A) Chen can terminate only if the mold represents a material breach of the seller's disclosure obligations
After the option period expires, the buyer no longer has the unrestricted right to terminate. However, if the seller failed to disclose known mold damage on the Seller's Disclosure Notice, this may constitute a material breach that provides grounds for termination.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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