When is the back-up contract’s effective date?
12/12/2014 | Author: Editorial Staff
My client wants to submit an offer for a property that’s already under contract using the Addendum for Back-up Contract. How do we determine the contract’s effective date?
The effective date for purposes of depositing earnest money and paying any termination option fee is the date of final acceptance. This is the date that the last party to sign the back-up contract communicates acceptance back to the other party or the other party’s agent, if applicable.
The effective date for all other performance under the contract is the “Amended Effective Date,” which is the date the seller notifies the back-up buyer that the first contract is terminated and the back-up contract becomes the primary contract.
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