Marcus and Diane are under contract to purchase a home in Fairfax, Virginia. Their contract includes a home sale contingency, which states that the purchase is contingent upon the sale of their current home by a specific date. That date passes and their home has not sold. The seller, Patricia, wants to proceed with the sale. What is the most likely outcome under Virginia law?
Correct Answer
D) Marcus and Diane may terminate the contract and are entitled to a refund of their earnest money deposit
When a home sale contingency deadline passes without the contingency being satisfied, the buyer typically has the right to terminate the contract and recover the earnest money deposit, provided the contingency clause has not been waived. Under Virginia contract principles, an unsatisfied contingency allows the protected party (here, the buyers) to void the contract without penalty.
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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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