Contracts
A Utah buyer and seller enter into a binding purchase contract. Later, both agree to tear up the contract and walk away. This is called:
AUnilateral rescission
BMutual rescission✓ Correct
CAccord and satisfaction
DNovation
Explanation
Mutual rescission is when both parties agree to cancel the contract, releasing each other from their obligations. Both parties must consent—one party cannot unilaterally rescind without legal justification.
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Key Terms to Know
Earnest Money
A 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.
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.
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