Buyers Beware: A "Free Look" Could Cost You

Author(s): John H. Kuhl

Source: The Institutional Real Estate Letter – North America

12/2/2008

John Kuhl co-authored this article discussing a recent case which underscores the importance of a purchase and sale agreement.

Executive Summary:

  • Buyers must think their PSA locks seller into the deal, but a California Appeals court recently ruled that a signed PSA that included a "free look"for the buyer was not a binding agreement.
  • To minimize the risk of having a seller back out, buyers should tailor the PSA to the specific transaction and address potential legal challenges to its enforceability.
     

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