Contracts
A Maryland contract clause requiring any disputes to be settled by arbitration is:
AIllegal — real estate disputes must go to court
BGenerally enforceable if both parties agreed to it in the contract✓ Correct
COnly enforceable for commercial transactions
DSubject to MREC approval
Explanation
Maryland enforces binding arbitration clauses in contracts where both parties have voluntarily agreed to them. Arbitration is an alternative dispute resolution process.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Earnest MoneyA 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.
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