A buyer and seller have executed a Utah REPC for a property in Ogden. The Due Diligence Deadline passes without the buyer cancelling. The Financing & Appraisal Deadline then passes without the buyer cancelling or providing notice of a financing problem. The buyer subsequently fails to close on the Settlement Deadline. Under the Utah REPC, what remedy is most likely available to the seller?
Correct Answer
B) The seller may retain the earnest money as liquidated damages or pursue other legal remedies
Under the Utah REPC, if the buyer defaults after all contingency deadlines have passed (Due Diligence and Financing & Appraisal), the seller's default remedies include retaining the earnest money as liquidated damages or pursuing other remedies available at law or equity, including specific performance. The REPC's default provision gives the seller this election. Since both deadlines passed without buyer action, the buyer is in breach and the seller has full remedy rights.
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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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