ContractsIntermediateDelaware Exam
A Delaware purchase contract contains a 'mortgage contingency.' If the buyer fails to obtain financing despite good-faith efforts, the buyer may:
ABe sued for specific performance by the seller
BTerminate the contract and recover the earnest moneyCorrect
CExtend the closing date indefinitely
DAssign the contract to another buyer
Why Terminate the contract and recover the earnest money Is Correct
Answer B: Terminate the contract and recover the earnest money
A mortgage contingency allows the buyer to terminate the contract and recover their earnest money if they cannot obtain the specified financing despite good-faith efforts within the contingency period.
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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