A contingency in a real estate purchase contract is best described as:
Why A condition that must be met for the contract to become binding Is Correct
Answer B: A condition that must be met for the contract to become binding
Exam Tip: Contracts
Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.
Key Contracts Terms in This Question
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Key Terms to Know
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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