Draft a sample \"contingency clause\" which will protect you (the buyer). You wa

Question

Draft a sample "contingency clause" which will protect you (the buyer).
You want to be sure the following items are included in the sale agreement:
     You need a loan of at least $100,000 and cannot afford payments of more than $675 per month;
You want to make sure that the house is structurally and otherwise physically sound Any repairs required are paid for (up to $1,000) by seller within a specific time frame.

Don't try to write an entire contract, just a brief "contingencies" paragraph incorporating the items listed above. Do your best to make sure that your contingency clause is clearly written, easily understood, and not subject to misinterpretation. Can you imagine the problems which might result if the verbiage you created was ambiguous and resulted in different interpretations?

Hint: Contingency clauses written by professionals usually begin with: "This transaction is contingent on the following items:" (then write all the items in your list of contingencies)


How do I really go about doing this? I'm a little confused on the assignment.

Explanation / Answer

“This Agreement is expressly contingent on Purchaser’s ability to obtain a commitment and funding pursuant to a loan (the “Loan”) on [terms acceptable to Purchaser] [the following terms]:

1. the purchaser having the right to take a loan of at least $100,000 with a monthly repayment not exceeding $675 per month.

2. The buyer having the right to engage a professional inspector to determine the structure and condition of the house, if the inspection report not satisfactory to purchaser than if necessary purchaser may do repair or remodeling, and claim up to $1,000 from seller with in a specific time frame. (The “Loan Contingency”).

In the event that the Loan Contingency is not satisfied within ________days of the date hereof, then Purchaser shall have the right to terminate this Agreement, in which event, Purchaser shall receive a full refund of its Deposit (If paid)”

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