Contracts
What is a 'kick-out clause' in a Delaware real estate contract?
AA provision allowing the seller to terminate the contract if a better offer arrives
BA provision allowing the seller to accept a better offer while notifying the contingent buyer to waive or match✓ Correct
CA provision allowing the buyer to exit the contract without penalty
DA provision requiring the removal of personal property before closing
Explanation
A kick-out clause (right of first refusal trigger) allows the seller to continue marketing the property and, if a better offer is received, to notify the original buyer, who then has a limited time to waive the contingency or be 'kicked out' of the contract.
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Key Terms to Know
Right of First Refusal
A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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