Contracts

A Massachusetts buyer's offer contains an 'escalation clause' providing they will beat any competing offer by $5,000 up to a maximum of $650,000. If the seller receives another bona fide offer of $630,000, what does the escalation clause produce?

A$635,000✓ Correct
B$650,000
C$630,000
D$640,000

Explanation

The escalation clause beats the competing offer by $5,000: $630,000 + $5,000 = $635,000. This is below the $650,000 cap, so the buyer's offer becomes $635,000.

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