Contracts
A NH real estate contract that includes an unlawful provision (e.g., a racially discriminatory restriction) is:
AValid in its entirety
BVoid as to the unlawful provision; courts may sever the illegal part and enforce the rest✓ Correct
CVoid in its entirety and neither party has any obligation
DValid only if both parties agree to enforce the illegal provision
Explanation
Courts may apply the doctrine of severability to strike the illegal provision while enforcing the rest of an otherwise valid contract. However, if the illegal provision is central to the contract, the whole contract may be void.
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Key Terms to Know
Option Contract
A 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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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