Contracts
Rescission of a real estate contract means:
AModifying the terms of the contract
BAssigning the contract to a third party
CCanceling the contract and returning the parties to their original positions✓ Correct
DExtending the closing date
Explanation
Rescission cancels the contract and returns both parties to the positions they were in before the contract was made. Rescission may be mutual (by agreement) or ordered by a court in cases of fraud, misrepresentation, or material breach.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
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