Contracts
A Massachusetts purchase agreement contains a contingency requiring the buyer to obtain financing at 'prevailing market rates.' This contingency is most likely:
AClearly enforceable because prevailing rates are easily defined
BSubject to dispute because 'prevailing market rates' is vague✓ Correct
CAutomatically satisfied when the buyer applies for a loan
DNot a valid contingency under Massachusetts law
Explanation
Vague contingency language like 'prevailing market rates' can create disputes. Well-drafted mortgage contingencies specify a maximum interest rate, loan amount, and term to provide clarity and avoid ambiguity.
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