A buyer submits an offer on a residential property for $450,000, conditional on financing for 10 business days. The seller counters at $460,000, requiring acceptance within 24 hours. The buyer accepts the counter. Five days later, the buyer's lender denies the financing. What is the status of the Purchase Contract?

Question: A buyer submits an offer on a residential property for $450,000, conditional on financing for 10 business days. The seller counters at $460,000, requiring acceptance within 24 hours. The buyer accepts the counter. Five days later, the buyer's lender denies the financing. What is the status of the Purchase Contract?

Answer options: ✅ The contract is terminated because the condition precedent was not fulfilled.

• The buyer is in breach of contract for failing to secure financing.
• The seller can demand specific performance as the financing condition was solely for the buyer's benefit.
• The contract is firm, as the buyer accepted the counteroffer.

Correct answer: The contract is terminated because the condition precedent was not fulfilled.

Explanation: A condition precedent, such as financing, must be fulfilled before the contract becomes firm and binding. If the condition is not met or waived by the specified deadline, the contract terminates, as per standard AREA Purchase Contract terms.