1️⃣ The New Due Diligence System
This is the biggest structural change in the contract.
The new form introduces a formal Due Diligence Period with a defined termination fee.
Key language:
- Buyer may terminate for any reason or no reason during the due diligence period.
- If terminated for due diligence reasons, the buyer must pay a termination fee to the seller.
Example language:
- “During the Due Diligence Period the Buyer may conduct any inspections and may terminate for any reason or no reason.”
- “Should the Buyer terminate during the Due Diligence Period for Due Diligence reasons they will pay Seller a Termination Fee.”
Also spells out what does NOT fall under Due Diligence:
Should the Buyer terminate under a different contractual contingency (Financing, Appraisal, CL-100, Sale of Buyer Property, etc.) the Termination Fee will not be owed. A Termination Fee is only owed if the Buyer terminates during the Due Diligence Period for Due Diligence Reasons