What is a contingency in a sales contract?
Sales contracts often contain contingency clauses, which are provisions that allow a contract to be cancelled in certain situations. Typical contigencies include: • Mortgage contingency – Allows for contract cancellation if the buyer is unable to obtain financing within a specified timeframe. • Inspection contingency – Buyer may cancel contract if unsatisfactory results are found during a general home inspection or termite inspection. • Contact is subject to Buyer selling their current home.