Common use of Buyer Termination Clause in Contracts

Buyer Termination. If the Seller cannot deliver a good and marketable title, this provision gives the Buyer the option to accept the title that the Seller can deliver (without a change in the sale price), or to terminate the Agreement. Rather than waiting for receipt of the title abstract to determine what liens or encumbrances may exist, the Seller can be encouraged to provide this information when the listing is obtained or at the time the Agreement is signed. If the Buyer terminates the Agreement because the Seller is unable to convey an acceptable title, any deposit monies are returned to the Buyer and certain pre-paid costs - including costs for inspections conducted under the terms of the Agreement - are reimbursed to the Buyer. This should be an incentive for the Seller to disclose all relevant information at the beginning of the transaction. Subparagraph (H): Oil, Gas and Mineral Rights Oil, gas and mineral rights impact several real estate markets across Pennsylvania. The default language states that the Seller has no knowledge of the status of oil, gas, and mineral rights for the Property. This is the default because, in many cases, it is unlikely that the Seller will have actual knowledge of the chain of title issues as they relate to oil, gas and mineral rights. If the Seller knows he does not own all oil, gas and mineral rights, the box should be checked. Note: Unless it is stated otherwise in the Agreement, it is assumed that the entire bundle of rights (surface and subsurface) will be conveyed with the Property. By checking the box, it is an acknowledgement that something less than the entire bundle of rights will be conveyed to the Buyer. While checking the box is helpful because it provides the Buyer with the information that the entire bundle of rights will not be conveyed, it does not tell the full story. It might leave the Buyer asking, “Well, if the Seller doesn’t own all of the oil, gas and mineral rights to the property, which ones do they own? And which ones do I get in the transaction?” The PAR Oil, Gas and Mineral Rights Addendum to Agreement of Sale (PAR Form OGM) allows the Seller to provide some of this information and encourage the Buyer to conduct an inspection of title issues relating to oil, gas and mineral rights. Use the check box to indicate that Form OGM is attached to the Agreement if the Seller does not own all oil, gas and mineral rights for the Property.

Buyer Termination. If the Seller cannot deliver a good and marketable title, this provision gives the Buyer the option to accept the title that the Seller can deliver (without a change in the sale price), or to terminate the Agreement. Rather than waiting for receipt of the title abstract to determine what liens or encumbrances may exist, the Seller can be encouraged to provide this information when the listing is obtained or at the time the Agreement is signed. If the Buyer terminates the Agreement because the Seller is unable to convey an acceptable title, any deposit monies are returned to the Buyer and certain pre-paid costs - -- including costs for inspections conducted under the terms of the Agreement - -- are reimbursed to the Buyer. This should be an incentive for the Seller to disclose all relevant information at the beginning of the transaction. Subparagraph (H): Oil, Gas and Mineral Rights Oil, gas and mineral rights impact several real estate markets across Pennsylvania. The default language states that the Seller has no knowledge of the status of oil, gas, and or mineral rights for the Property. This is the default because, in many cases, it is unlikely that the Seller will have actual knowledge of the chain of title issues as they relate to oil, gas and mineral rights. If the Seller knows he does not own all oil, gas and mineral rights, the first box should be checked. Note: Unless it is stated otherwise in the Agreement, it is assumed that the entire bundle of rights (surface and subsurface) will be conveyed with the Property. By checking the box, it is an acknowledgement that something less than the entire bundle of rights will be conveyed to the Buyer. While checking the box is helpful because it provides the Buyer with the information that the entire bundle of rights will not be conveyed, it does not tell the full story. It might leave the Buyer asking, “Well, if the Seller doesn’t own all of the oil, gas and mineral rights to the property, which ones do they own? And which ones do I get in the transaction?” The PAR Oil, Gas and Mineral Rights Addendum to Agreement of Sale (PAR Form OGM) allows the Seller to provide some of this information and encourage the Buyer to conduct an inspection of title issues relating to oil, gas and mineral rights. Use the check box to indicate that Form OGM is attached to the Agreement if the Seller does not own all oil, gas and mineral rights for the Property.