Contingencies in Commercial Real Estate Contracts

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Most real estate contracts contain “contingencies,” which allow you to walk away from the deal without penalty. If the conditions written in the contract are not met, you can withdraw from the entire contract as if it never happened. 

Reason for Contingencies in Real Estate Contracts

Contingencies offer you protection by requiring the performance of the conditions you negotiated into the contract. Yes, you can back out and use the nonperformance of the contingency as your reason. But, you can also use the written requirement incorporated into your agreement as a negotiating tool for further negotiation. Your new “contingency” might better serve you by offering you an even better deal after nonperformance of the prior condition. 

Examples of Contingencies in Real Estate Contracts

Examples of contingencies in a contract to purchase commercial property include the following: 

(1) Mortgage Contingency – You are able to get a mortgage loan of at least 75% of the purchase price.

(2) Inspection Contingency – You require a contractor to inspect the condition of the building and are satisfied with the contractor’s report. Another example is your determination after inspection that the building can be renovated to your satisfaction.

(3) Other Sale Contingency –  You require the successful sale (or purchase) of a different piece of commercial real estate. This contingency is often seen in purchase contracts in which the sale of the first piece of real estate is meant to finance the sale of the second piece.

Getting Help with Contingencies in Real Esate Contracts

Your commercial real estate lawyer can help you determine the right contingencies to put in your commercial building contract as well as draft the best language to cover your comditions for executiom of the agreement.


Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption