A buyer in Draper, Utah has an executed REPC with a Due Diligence Deadline of March 10 and a Financing & Appraisal Deadline of March 25. The buyer's inspector finds a serious foundation issue on March 8. The buyer does NOT cancel before the March 10 Due Diligence Deadline. On March 20, the buyer's lender denies the loan, citing the foundation issue as an unacceptable risk. The buyer sends written notice to the seller on March 21 invoking the Financing & Appraisal condition. Which outcome is most legally accurate under the Utah REPC?
Correct Answer
D) The buyer may successfully invoke the Financing & Appraisal condition and receive a return of earnest money because the lender denied the loan before the March 25 deadline
The Financing & Appraisal condition in the Utah REPC is a separate and independent condition from the Due Diligence condition. Even though the buyer missed the opportunity to cancel under the Due Diligence condition, the buyer can still invoke the Financing & Appraisal condition if the lender actually denies the loan — regardless of the reason for denial. The lender's denial occurred on March 20, and the buyer's written notice was given on March 21, both before the March 25 Financing & Appraisal Deadline. This is a valid invocation of a separate contractual right.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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