real-estate
Are buyer contingencies still needed if no Ernest money
<p>A seller and I have agreed that no Ernest money will be paid in the contract. However, there are no financial or appraisal contingencies in the contract to void the contract if I can’t get the loan or the house doesn’t appraise for at least the purchase price. My questions is, are these contingencies needed if there is no Ernest money put down?</p>

<p>I am assuming that your contract is in a jurisdiction of the U.S. or of one of the several countries with similar <em>contract law</em>.</p>

<blockquote>
  <p>are these contingencies needed if there is no Ernest money put down?</p>
</blockquote>

<p>With or without earnest money, a contract does not need to outline contingencies.</p>

<p>Strictly speaking, outlining in a contract some of these contingencies might even be redundant (but "redundant" should not be construed as "discouraged") because notions of <em>frustration or impracticability of a contract</em> are --by default-- cognizable in <em>contract law</em>. See <a href="https://www.nylitigationfirm.com/files/restat.pdf" rel="nofollow noreferrer"><em>Restatement (Second) of Contracts</em></a> at § 265 and 266.</p>

<p>In a context of real estate transactions, a buyer's unexpected inability to secure the funds for the purchase would certainly render the contract impracticable. However, the seller might still be entitled to reasonable restitution in the event of impracticability or frustration. See Restatement at § 377. </p>

<p>For instance, if as a result of that contract the seller missed other opportunities which were provably more profitable, the buyer might have to compensate the seller for that difference. That is one good reason for outlining in a contract what remedies (if any) are available in the event that a contingency precludes the completion of that contract.</p>
