Tom and Linda are selling their Vermont home and have accepted an offer from a buyer. The purchase agreement includes a contingency requiring the buyer to obtain a Vermont Wastewater System and Potable Water Supply Permit for a proposed addition. If the permit is denied, which outcome is most consistent with Vermont real estate contract practice?
Correct Answer
C) The buyer may void the contract and recover the earnest money deposit based on the failed contingency
When a Vermont purchase agreement includes a wastewater/potable water permit contingency and the permit is denied, the contingency fails and the buyer is entitled to void the contract and recover the earnest money deposit. Vermont's Environmental Protection Rules require permits for new or replacement wastewater systems, and permit contingencies are a standard and enforceable contract provision in Vermont transactions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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