Contracts

A contract contingency that protects the buyer if they are unable to obtain financing is called a:

AEscalation clause
BFinancing contingency✓ Correct
CRight of first refusal
DLiquidated damages clause

Explanation

A financing contingency (or mortgage contingency) allows the buyer to terminate the contract without penalty if they are unable to obtain a mortgage loan on specified terms within the contingency period. It is one of the most common contingencies in residential contracts.

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