A bad contingency clause can produce a dissatisfied buyer

Almost every real estate sale agreement includes some contingencies: conditions that, if not met, will allow the seller or buyer to cancel the sale. The two most common are a financing contingency and a property inspection contingency.

Be sure when you’re writing a contingency that you identify what the contingency actually is. Don’t write “Buyer’s obligation is subject to Buyer obtaining a property inspection,” or (even worse) “This transaction is subject to Buyer obtaining a property inspection.” The actual contingency isn’t the inspection, but the buyer approving the inspection. What if the buyer obtains an inspection, but doesn’t like what the inspector has to say?  The buyer has satisfied the contingency, but is dissatisfied with the property, and likely to be dissatisfied (or worse) with the attorney or agent who drafted the contingency clause.

Instead, write “Buyer’s obligation is subject to Buyer obtaining and approving a professional inspection of the property on or before _______, 2018.”   When the actual contingency is the buyer being happy, say so.