Contracts
In Massachusetts, a real estate contract containing a material mistake that both parties made may be:
AEnforced as written regardless of the mistake
BSubject to rescission or reformation by court order based on mutual mistake✓ Correct
CAutomatically void
DEnforceable only by the party who did not make the mistake
Explanation
A mutual mistake (where both parties were mistaken about a material fact) may allow a court to reform (rewrite) or rescind (cancel) the contract in Massachusetts, as enforcing a contract based on false assumptions may be inequitable.
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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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