Under Virginia contract law, a financing contingency in a residential purchase agreement primarily protects which party?
Correct Answer
B) The buyer, by allowing contract termination if financing cannot be secured
A financing contingency protects the buyer by making the contract voidable if the buyer is unable to obtain the specified financing within the stated timeframe. Under Virginia contract principles, if the contingency is not satisfied or waived, the buyer may terminate the contract and recover the earnest money deposit.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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