Contracts
In Minnesota, a real estate purchase agreement that contains a provision for arbitration of disputes means:
ADisputes automatically go to the Department of Commerce for resolution
BDisputes are resolved through private arbitration rather than court litigation, if the arbitration clause is triggered✓ Correct
CThe buyer waives all legal rights
DArbitration is required for only construction-related disputes
Explanation
An arbitration clause in a Minnesota purchase agreement means that specified disputes will be resolved through binding private arbitration rather than court litigation. Arbitration can be faster and less expensive than court proceedings.
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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.
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.
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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