Lesson 8: Contingent Transactions

Question 1

contingency provision

Answer 1

Every contingency provision should contain four elements:

• a clear statement of what the condition is and how it can be met;
• how the other party is to be notified that the condition is met or removed;
• a deadline by which the condition must be met or removed; and
• the rights of the parties if the condition is not met or removed by the deadline.

Question 2

Release Clauses

Answer 2

When a purchase agreement is contingent on the sale of the buyer’s home, it’s common to include a provision that gives the seller the right to keep the house on the market and accept another offer. This provision, known as a “release clause” or a “72-hour clause,” may be used with any type of contingency, but it’s most commonly used with a sale of the buyer’s home contingency. ”