What is a “contingency” in a real estate sale agreement?

A contingency is a provision contained in a sale agreement that requires a specified event to occur, or else one of the parties (usually the buyer) can terminate the agreement. Typical contingencies include a mortgage contingency (buyer must get a mortgage in order to buy), a sale of existing home contingency (buyer must sell current home in order to buy new house); a home inspection contingency (buyer can cancel agreement if an inspection of the property by an expert discloses unacceptable defects), and radon and pest inspection contingencies. If a contingency fails, the agreement is voided and the buyer is entitled to a return of the deposit.

Legal Advice Disclaimer: The information presented on this website serves solely as general guidance and should not be construed as legal advice by MacDonald, Illig, Jones & Britton LLP as a replacement for seeking personalized legal counsel from a qualified attorney. MacDonald, Illig, Jones & Britton LLP does not assume liability for the accuracy or reliability of content hosted on any third-party websites accessible through links provided on this site.