Under Wisconsin law, all of the following are valid reasons a buyer may rescind a purchase agreement and recover earnest money EXCEPT:
Correct Answer
A) The buyer changed their mind about the purchase after the inspection contingency was waived.
Once a buyer waives the inspection contingency in writing, they give up the right to rescind based on inspection findings. A buyer who simply changes their mind after waiving contingencies has no legal basis to rescind the contract and recover earnest money. Changing one's mind is not a valid contractual basis for rescission — it would constitute a breach of contract, and the seller would be entitled to retain the earnest money as liquidated damages.
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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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