Contracts
A Nevada purchase agreement includes a due diligence period of 15 days. On day 14, the buyer discovers a zoning issue and sends written notice of cancellation. What is the outcome?
AThe buyer forfeits the earnest money for late notice
BThe cancellation is valid and the earnest money is returned to the buyer✓ Correct
CThe seller may keep half the earnest money as liquidated damages
DThe buyer must complete the transaction since only one day remained
Explanation
If the buyer provides written cancellation within the contractually agreed due diligence period (day 14 of 15), the cancellation is timely and valid. Nevada purchase agreements typically allow buyers to cancel for any or no reason during the due diligence period and receive a full refund of their earnest money deposit.
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