What happens if a condition of a contingency clause is not met?

When a contingency clause in a real estate contract is included, it sets specific conditions that must be met for the contract to be enforceable. If these conditions are not met, the contract can become void or voidable.

This means that depending on the specific circumstances—such as if the contingency was not fulfilled within the specified time frame—the party that benefits from the contingency (often the buyer) has the right to rescind the contract without facing penalties. This maintains the integrity of the agreement by ensuring that both parties remain protected under the conditions that were mutually agreed upon at the time of signing.

For example, if a buyer’s purchase is contingent on obtaining financing and they fail to do so, they can choose to cancel the contract without any legal repercussions, affirming that the transaction cannot proceed as initially outlined. This aspect of the contingency clause is critical in real estate transactions, as it allows parties to exit agreements when certain agreed-upon terms are not satisfied, thus ensuring fairness and accountability in the contractual process.