Contracts
Contingency
A condition that must be met or waived for the contract to proceed
Financing, inspection, appraisal and sale-of-current-home are the common ones. A contingency does not perform anything by itself — it defines a circumstance in which a party may cancel and recover their deposit rather than be in breach.
How the exam asks about it
A financing contingency does not obtain the loan and does not extend closing. It protects the deposit if financing on the stated terms does not appear.
Related terms
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