What is a Cancellation Date?
A "cancellation date" in a real estate contract is a specific date and time that serves as the deadline for all contingencies to be met or removed. This date effectively replaces all other contingency dates in the contract and serves as a final deadline for the buyer or seller to cancel the contract without penalty, if certain conditions are not met.
For example, a typical real estate contract may include contingencies for obtaining financing, completing inspections, or resolving title issues. If these contingencies are not met by the cancellation date, either the buyer or the seller may cancel the contract without consequence.
By having a single date and time as the cancellation date, the contract becomes clearer and easier to manage, as all parties are aware of the final deadline for resolving contingencies and making a decision about the sale. If a party cancels the contract on or before the cancellation date, the contract is considered void and any deposits or other funds are returned to the appropriate parties.