Contingency

Contingency

A contractual term that requires a certain act or event before the contract becomes binding on one party, usually the buyer.  Common contingencies include the Financing Contingency, the Title Contingency, and the Inspection Contingency.

Depending on the terms, the contingency may allow the buyer to walk away with a return of the earnest money (most commonly the inspection contingency). Other contingencies allow the seller an opportunity to cure the objection (title contingency) or allows the buyer to walk if something else happens (like a failure of financing).