72-hour clause

This article is about real estate escape clauses. For other uses, see 72-hour clause (disambiguation).

Property law
Part of the common law series
Types
Real property Personal property
Acquisition
Gift Adverse possession Deed Conquest Discovery Accession Lost, mislaid, and abandoned property Treasure trove Bailment License Alienation
Estates in land
Allodial title Fee simple Fee tail Life estate Defeasible estate Future interest remainder Concurrent estate Leasehold estate Condominiums Real estate
Conveyancing
Bona fide purchaser Torrens title Strata title Estoppel by deed Quitclaim deed Mortgage Equitable conversion Action to quiet title Escheat
Future use control
Restraint on alienation Rule against perpetuities Rule in Shelley's Case Doctrine of worthier title
Nonpossessory interest
Easement Profit Usufruct Covenant Equitable servitude
Related topics
Fixtures Waste Partition Practicing without a license Property rights Mineral rights Water rights prior appropriation riparian Lateral and subjacent support Assignment Nemo dat Quicquid plantatur Conflict of property laws Blackacre
Other common law areas
Contract law Tort law Wills, trusts and estates Criminal law Evidence

A 72-hour clause, typically inserted in real estate sale contracts, is also known as an escape clause, release clause, kick-out clause, hedge clause or right of first refusal clause.

The 72-hour clause is a seller contingency which allows the seller to accept a buyer's contingent offer to purchase his/her property, while allowing the seller to continue to market the property.

If the seller now receives another (better) offer to purchase the same property, he/she can also accept this offer, as a back-up offer. The seller can then activate the escape clause by notifying the original buyer about the back-up offer.

The first buyer now has a specified period of time to fulfil all the buyer contingencies in the contract of sale, or cancel the contract and lose the property. If the buyer cannot fulfil the contingencies in time, the original contract will cancel and the back-up offer will move into first position.

The term 72-hour clause can be somewhat misleading, because the notice period within which the buyer must fulfill the buyer contingencies can be negotiated. The effective notice period may therefore be longer or shorter than 72 hours. Further ambiguities arise if the 72 hours were only considered counted on business working days, excluding weekends and legal holidays

This article is issued from Wikipedia - version of the Sunday, March 02, 2014. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.