BIC TIP #1107: Contracts Terminate: One Way or Another
Real estate brokers love a smooth closing, but let us face it: not every contract makes it to the finish line. Some glide gracefully into Settlement, and others skid sideways into the ditch. When a Buyer decides to terminate, the key question becomes which form fits the situation.
If the Buyer is ending the contract on their own right (for example, during the Due Diligence Period), they will use the Unilateral Termination of Contract – Form 350-T. This form becomes effective upon delivery with the Buyer’s signature only. Yes, the Seller should sign for acknowledgment, but the Seller’s signature is not required for the termination to take effect.
If both parties agree to cancel the contract and settle up all loose ends, that is a job for the Mutual Termination Agreement – Form 390-T. This one requires signatures from both Buyer and Seller before it becomes effective. Without dual signatures, there is no mutual termination.
Different endings require different paperwork. Make sure your client chooses the correct exit ramp so that the transaction ends cleanly—whether it is a celebration at closing or a polite parting of ways.
