Agent Rosa is representing a seller in a West Jordan, Utah transaction. The buyer submits an offer using the Utah REPC with a Due Diligence Deadline of June 5 and a Financing & Appraisal Deadline of June 20. The seller accepts on May 28. On June 6, the buyer sends a written notice claiming to cancel under the Due Diligence condition. What is the most accurate statement about this situation?
Correct Answer
B) The buyer's cancellation notice is ineffective because the Due Diligence Deadline of June 5 has already passed
The Due Diligence Deadline expired on June 5. The buyer's attempt to invoke the Due Diligence cancellation right on June 6 is ineffective because the contractual right to cancel under that condition no longer exists. Once the Due Diligence Deadline passes without the buyer cancelling, the Due Diligence condition is waived. The buyer is now bound by the contract unless another condition (such as the Financing & Appraisal condition) provides a separate cancellation right.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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