ContractsIntermediateDelaware Exam

A contingency clause in a purchase agreement:

ABinds both parties unconditionally
BMakes the contract conditional upon the occurrence of a specified eventCorrect
CGuarantees financing for the buyer
DWaives the buyer's inspection rights

Why Makes the contract conditional upon the occurrence of a specified event Is Correct

Answer B: Makes the contract conditional upon the occurrence of a specified event

A contingency clause suspends the binding nature of the contract pending the fulfillment of a specified condition, such as satisfactory inspection, financing approval, or sale of a prior home.

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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