A buyer in Kaysville, Utah signs a Utah REPC with a $10,000 earnest money deposit, a Due Diligence Deadline of July 10, and a Financing & Appraisal Deadline of July 25. The buyer's inspector finds minor cosmetic issues. The buyer does not cancel before the July 10 Due Diligence Deadline, believing the seller will fix the issues. On July 12, the seller refuses to make any repairs. On July 15, frustrated, the buyer instructs the buyer's agent to 'get out of this contract.' The buyer's agent sends a written cancellation notice to the seller citing the seller's refusal to repair as a breach. Which analysis most accurately describes the buyer's legal position?
Correct Answer
B) The buyer is bound by the contract and risks losing earnest money because the Due Diligence Deadline has passed and the seller had no contractual obligation to make repairs
This is an expert-level trap question. The buyer failed to cancel before the Due Diligence Deadline (July 10), waiving that unconditional cancellation right. The seller's refusal to make repairs is NOT a breach of the REPC unless the contract specifically required the seller to make those repairs — the REPC does not automatically obligate sellers to make repairs identified in an inspection. The seller's refusal to negotiate repairs voluntarily is not a contractual breach. The buyer is now bound by the contract, and attempting to cancel without a valid contractual basis puts the $10,000 earnest money at risk of forfeiture.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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