ContractsQuestion 53 of 100
A contingency in a real estate contract is:
a.A guarantee that the sale will close
b.A condition that must be met for the contract to proceed or become binding
c.A penalty for late closing
d.The broker's commission clause
Explanation
A contingency is a condition, such as financing approval or a satisfactory inspection, that must be satisfied for the contract to move forward. If the contingency is not met, the affected party may usually cancel without penalty. Contingencies protect buyers and sometimes sellers from unforeseen problems.
Practice all 100 questions free — no signup required.
Related questions on this topic
- A contract that has been fully performed by both parties is described as:
- A contract entered into by a minor is generally:
- Earnest money in a purchase contract primarily serves to:
- The substitution of a new contract or new party for an existing one, releasing the original obligation, is called:
- A 'time is of the essence' clause in a contract means that:
- If a buyer breaches a real estate contract, a liquidated damages clause typically allows the seller to:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against New York Real Estate Salesperson Licensing Exam · How we review