Contracts
An Alaska purchase agreement provides that the buyer may cancel the contract if the property fails a home inspection for any reason. This type of contingency is called a(n):
AFinancing contingency
BInspection (due diligence) contingency✓ Correct
CAppraisal contingency
DTitle contingency
Explanation
An inspection or due diligence contingency gives the buyer the right to have the property professionally inspected and to cancel the contract — for any reason or for specified reasons — within the contingency period. This protects the buyer from being bound to purchase a property with undiscovered defects.
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