Contingency

A clause that allows a buyer or seller to cancel a real estate contract if certain conditions are/are not met. For instance, an inspection contingency means that the buyer is willing to buy the house if the home inspection results are satisfactory to the buyer. A seller might include a contingency to find a replacement home. This allows the seller time to find a new home, and if they cannot find one within the alloted time frame, then the seller could have the right to back out of the contract. Learn more about mortgage contingencies.