North Dakota Real Estate Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

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What is a contingency clause in a real estate contract?

A list of required inspections

A provision that must be met for the contract to be valid

A contingency clause in a real estate contract refers to a specific provision that must be fulfilled for the contract to be valid and legally binding. This clause outlines conditions that can impact the agreement, such as the buyer needing to secure financing, the property passing an inspection, or the buyer selling their existing home before purchasing a new one. If the contingencies are not met within the agreed-upon timeframe, the contract may be voided without penalty to the party protecting the contingencies.

Understanding the role of a contingency clause is crucial for both buyers and sellers, as it ensures that both parties have a clear understanding of what must occur for the sale to proceed. It provides a safeguard for buyers, allowing them to back out of the purchase if certain critical conditions are not satisfied, which can protect them from potential financial loss or burdens.

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A deadline for accepting offers

A description of the property’s condition

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