Contracts
A Texas contract contains an 'escalation clause' that allows the buyer to offer more than competing offers up to a maximum amount. TREC rules regarding such clauses are:
AThey are prohibited by TREC
BThey are not addressed in TREC promulgated forms; their use requires careful handling to avoid issues✓ Correct
CThey are required for all multiple-offer situations
DThey automatically create a binding contract
Explanation
Escalation clauses are not part of TREC promulgated forms and raise questions about offer integrity and competitiveness. Agents using escalation clauses must ensure proper disclosure and carefully handle the process to avoid disputes.
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