Contracts
A Kentucky purchase contract states that the buyer may cancel and receive a full deposit refund if the home inspection reveals defects costing more than $3,000 to repair. This is a(n):
AWarranty clause
BContingency clause✓ Correct
CLiquidated damages clause
DForfeiture clause
Explanation
This is a contingency clause — the buyer's obligation to purchase is contingent upon the home inspection revealing no more than $3,000 in repairs. If the condition is not met, the buyer can exit the contract with the deposit returned.
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