Can buyer back out of the escrow of commercial property after signing?
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Can buyer back out of the escrow of commercial property after signing?
He already signed on escrow papers however, I am waiting for inventory
document and then sign. Now, he wants to back out. Can he do that?
Asked on September 18, 2017 under Real Estate Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
He can only back out if one of the following three things occured:
1) The contract itself lets him back out: that is, there is some term or provision in the contract that lets him void or terminate it without penalty at this time, and he complies with its provisions.
2) You breach some material (important) term of the contract: one party's material breach allows the other party to treat the contract as terminated.
3) You committed fraud by knowingly or intentionally misrepresenting (lying) to the other party to get them to enter into the transaction, and they reasonably relied on that misrepresentation: fraud provides a basis for recinding a contract.
Apart from the above, he can only get out in very unusual, but fairly obvious, circumtances: e.g. he was mentally incompetent when he signed the contract; the government passes a law making the contract illegal; etc. Otherwise, he is bound and must escrow.
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