Contracts
A contract contingency that states 'This offer is contingent upon the buyer obtaining financing at no more than 7% interest within 30 days' is an example of:
AA liquidated damages clause
BA condition precedent✓ Correct
CAn acceleration clause
DA defeasance clause
Explanation
A condition precedent must be satisfied before the party's obligation to perform becomes binding. The financing contingency is a condition precedent — if the buyer cannot obtain financing at the specified terms, the contract does not need to be completed.
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