Contracts
A Mississippi buyer's agent submits an offer with an escalation clause: 'Buyer will pay $1,000 more than any competing bona fide offer up to a maximum of $325,000.' The seller receives another offer at $310,000. The escalated offer price is:
A$325,000
B$311,000✓ Correct
C$310,000
D$315,000
Explanation
The escalation clause activates at $1,000 above the competing offer: $310,000 + $1,000 = $311,000. Since $311,000 is below the $325,000 maximum cap, the escalated price is $311,000. Escalation clauses allow buyers to remain competitive without automatically offering the maximum price when competition is lower.
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