Contracts
A 'contingency' in a real estate purchase agreement is:
AA penalty clause for late closing
BA condition that must be satisfied for the contract to become binding✓ Correct
CThe seller's right to cancel at any time
DAn addendum adding additional properties to the sale
Explanation
A contingency is a condition that must be fulfilled for the contract to proceed. Common contingencies include financing, inspection, and appraisal. If a contingency is not met (and not waived), either party (depending on the contingency) may cancel without penalty.
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