Contracts
In Maryland, a contingency in a purchase contract that is not satisfied or waived by its deadline typically results in:
AAutomatic contract extension
BThe contract becoming voidable at the option of the party the contingency protects✓ Correct
CImmediate forfeiture of earnest money
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Explanation
An unfulfilled contingency allows the protected party (usually the buyer) to void the contract and recover their earnest money, though they may also choose to waive the contingency.
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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.
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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