Contingent Contract With Example In Salt Lake
Description
Form popularity
FAQ
Parts of a Contingency Contract A contingency contract has three major parts: the task, the reward and the task record.
Disadvantages of Contingent Contracts: Parties may need to seek legal advice or engage in lengthy negotiations to establish clear terms. Increased Costs: The inclusion of contingencies in contracts may result in additional costs or financial implications.
Contingent contracts, like contingencies themselves, cannot occur unless a certain condition is met. For instance, the sale of a home cannot take place without a prior home inspection, and an aircraft cannot leave the hangar without a thorough walk-around inspection by the pilot.
Companies hire contingent employees and contract employees for a specific project or pre-determined amount of time. A contingent worker does not earn a salary from the employer. Instead, they receive payment per hour worked or commissions for the work they complete.
For instance, a home seller may agree to an offer with the contingency that they must find a new home before they sell. If they are unable to find another home within a specified time frame, they may cancel the deal without penalty — so long as this contingency is spelled out in the contract.
A contingent contract is a legal agreement in which the terms and conditions only apply or take effect if a specific event occurs. Essentially, the parties involved agree to perform actions or obligations based on the occurrence or non-occurrence of a particular event in the future.
The most common contingency is the home inspection contingency. This condition on an offer states the home sale will only be finalized if the property passes a professional home inspection. In other words, buyers can walk away from a home sale if the home inspection turns up serious problems.
A contingency clause should clearly outline the conditions, how the conditions are to be fulfilled, and which party is responsible for fulfilling them. The clause should also provide a timeframe for what happens if the condition is not met.
