Contracts
A 'contingency' in a NJ real estate contract means:
AThe contract is void
BThe contract is binding but certain obligations are conditional upon specified events or conditions being satisfied✓ Correct
COnly one party is bound
DThe attorney review period is waived
Explanation
A contingency makes the performance of a contractual obligation dependent on the occurrence of a specified condition. If the condition is not met (and not waived), the contract can be voided and the deposit returned per the contingency terms.
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Key Terms to Know
Contingency
A 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.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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