A buyer enters into a TREC contract with $0 option fee and a 0-day option period (effectively no option period). The buyer's inspector, hired before the offer was accepted, finds major structural issues. After the contract is executed, the buyer wants to terminate. Under the contract, the buyer:
Correct Answer
A) Cannot terminate without a contractual basis such as a financing contingency or seller breach
Without an option period, the buyer has no unrestricted right to terminate. The buyer would need another contractual basis—such as a financing contingency, title objection, or seller breach—to terminate. Structural issues discovered without an option period do not provide an automatic termination right unless the seller failed to disclose known defects.
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Related Topics & Key Terms
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Related Concepts
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.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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