Definition: A contract provision making an obligation or the continuation of the transaction depend on a specified event or condition.
Example
A purchase contract contains a financing contingency with a stated deadline and notice requirements.
Keep the distinction clear
A contingency is not an unlimited right to cancel. Its wording, deadlines, required efforts, and notice procedures determine its effect.
Related terms
Contract · Sale Contract · Performance (Contract)
Keep studying
References: California DRE: glossary
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