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A backup contract in Texas becomes the primary contract when:

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Question & Answer

Review the question and all answer choices

A

The seller accepts it

Option A is incorrect because simply accepting a backup contract doesn't make it primary. A backup contract, by definition, only becomes active when the primary contract fails. Acceptance alone doesn't terminate the existing primary contract.

B

The first contract terminates and seller notifies backup buyer

Correct Answer
C

Automatically after 30 days

Option C is incorrect because there is no automatic 30-day conversion period for backup contracts in Texas or most other states. The timing depends entirely on when the primary contract terminates, not a predetermined timeframe.

D

The buyer removes all contingencies

Option D is incorrect because the removal of contingencies by the primary buyer doesn't automatically terminate that contract or activate the backup contract. The primary contract remains in effect unless properly terminated by other means.

Why is this correct?

Answer B is correct because a backup contract only becomes primary when the first contract terminates AND the seller provides formal notice to the backup buyer. This two-step process ensures the backup buyer has the opportunity to proceed with the purchase under the original terms of their backup contract.

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