Contracts
What is the legal effect of a contingency in a Delaware real estate purchase agreement?
AIt makes the contract void immediately
BIt makes the contract voidable if the specified condition is not met within the stated timeframe✓ Correct
CIt requires court approval to enforce
DIt automatically extends the closing date by 30 days
Explanation
A contingency in a Delaware purchase agreement makes the contract voidable — either party (or the specified party) may terminate the contract without penalty if the contingency condition is not satisfied within the stated timeframe. Common contingencies include financing, inspection, and appraisal.
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