Contingency: A provision in a contract that requires the completion of a certain act or the happening of a particular event before that contract is binding. Often a buyer will submit an offer to purchase contingent on obtaining financing or rezoning. In such a case, the seller should be sure the contingency is specifically detailed and unambiguous and that there is a definite cutoff date; otherwise the buyer could tie up the seller’s property indefinitely while attempting to get financing or rezoning. A party may waive any contingency clause that was inserted for his or her benefit. For example, the buyer could force the seller to sell the property even though the buyer was not able to obtain the zoning– the original contingency in the contract for sale. Contingency implies a promise to use one’s efforts to bring it about.
Real Estate Word of the Day: Contingency
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