A buyer submits a WB-11 Offer to Purchase on a property in La Crosse. The offer contains a 'bump clause' (right of first refusal) allowing the seller to continue marketing the property. The seller receives a second offer and notifies the first buyer, who has 48 hours to remove the bump clause contingency. The first buyer fails to respond within 48 hours. The seller then accepts the second offer. Under Wisconsin law, which statement is most accurate?
Correct Answer
A) The seller may proceed with the second buyer because the first buyer's failure to respond within 48 hours terminated the first contract per its own terms
A bump clause (also called a right of first refusal or 'first right' contingency) in a Wisconsin WB-11 Offer to Purchase is a contractual provision that gives the buyer a specified period — here 48 hours — to remove the contingency and proceed unconditionally when the seller receives a bona fide secondary offer. If the first buyer fails to act within the stated timeframe, the contingency is not satisfied and the contract terminates by its own terms. The seller may then accept the second offer and the first buyer's earnest money is returned. This is a self-executing contractual mechanism, not a breach by either party.
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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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