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Real estate glossaryNational exam concept

Contingency

A contingency is a contract condition that makes a party's duty, right to terminate, or obligation to proceed depend on a stated event, standard, deadline, or approval.

Exam area: Contracts

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What does “contingency” mean in real estate?

A contingency is a contract condition that makes a party's duty, right to terminate, or obligation to proceed depend on a stated event, standard, deadline, or approval.

How is “contingency” different from the closest wrong answer?

A contingency is a specific condition in the contract. A due-diligence period can provide a broader termination right depending on its wording.

What is the Georgia-specific rule?

The signed Georgia contract controls the notice method, deadline, satisfaction standard, waiver, and effect of failure. There is no universal financing or inspection deadline.

Worked exam example

Scenario

A purchase obligation depends on the buyer obtaining a stated loan by a stated date and giving notice in the form the agreement requires.

What is the most common exam trap?

Trap correction

A contingency does not protect a party forever. Missing the notice or deadline can waive the right.

Original exam check

Apply the definition

A purchase agreement lets the buyer terminate if a loan is not approved by May 10, with written notice to the seller by that date. The loan is denied on May 8, but the buyer sends no notice until May 15. What is the likely result?

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Recommended next complete lesson

Continue with Contracts complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.