A buyer submits a Utah REPC offer on a West Valley City property with a Due Diligence Deadline of 14 days after acceptance and a Financing & Appraisal Deadline of 21 days after acceptance. The seller counters, changing only the closing date. The buyer accepts the seller's counteroffer in writing. Three days later, the buyer's lender informs her that she does not qualify for financing. The buyer wants to cancel the contract and recover her earnest money. Which of the following most accurately describes the buyer's options at this stage?
Correct Answer
D) The buyer may cancel under either the Due Diligence or Financing & Appraisal condition, as both deadlines are still open
Under the Utah REPC's layered contingency structure, both the Due Diligence Deadline (14 days) and the Financing & Appraisal Deadline (21 days) are still open three days after acceptance. The buyer may invoke either condition to cancel the contract and recover her earnest money. The Due Diligence condition allows the buyer to cancel for any reason within that period. The Financing & Appraisal condition specifically addresses the inability to obtain financing. Since both deadlines remain open, the buyer has the right to cancel under either provision and is not limited to just one.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
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