A due diligence contingency clause in a contract allows a party, typically the buyer, to thoroughly investigate the property or asset in question before fully committing to the purchase. It provides the buyer with the option to terminate the agreement or renegotiate terms if the findings during the due diligence period are unsatisfactory.
Due Diligence Contingency. Purchaser shall have until 5:00 PM EST on the date that is thirty (30) days after the Effective Date (the “Due Diligence Period”) to perform its due diligence review of the Property and all matters related thereto which Purchaser deems advisable in its sole discretion. If Purchaser, in its sole discretion, is not satisfied with the results of its due diligence review of the Property or the Business for any reason or no reason whatsoever, Purchaser shall have the right to terminate this Agreement by providing written notice to Seller prior to the expiration of the Due Diligence Period (the “Due Diligence Contingency”). If Purchaser terminates this Agreement pursuant to the Due Diligence Contingency in accordance with this Section 4.1(a), then the Earnest Money shall be promptly delivered to Seller and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination. Notwithstanding anything in this Agreement to the contrary, and for the avoidance of doubt, the Parties acknowledge and agree the Earnest Money shall be non-refundable to Purchaser in connection with and/or related to a Due Diligence Contingency. If Purchaser does not terminate this Agreement pursuant to the Due Diligence Contingency in accordance with this Section 4.1(a), Purchaser shall be deemed to have waived its rights to terminate this Agreement pursuant to the Due Diligence Contingency. Notwithstanding anything contained herein to the contrary Purchaser may at any time, with the consent of Seller, waive the Due Diligence Period by written notice to Seller and thereafter the Due Diligence Period shall be deemed expired and the closing shall occur in accordance with Section 9.1 hereof.
Satisfaction of Due Diligence. If the Due Diligence Contingency is not satisfied on or before the end of the Due Diligence Period (or such later time as may be expressly provided herein or by mutual written agreement of Buyer and Seller), Buyer will not be deemed to be in default. Buyer’s sole remedy for failure of the Due Diligence Contingency will be to terminate this Agreement and for Buyer to obtain the refund of the Deposit and interest accrued thereon in which case neither party shall have any further obligation to or rights against the other except as expressly provided in this Agreement.
Due Diligence Inspection. Due Diligence Review. Buyer's obligation to purchase the Property is conditioned upon Buyer's review and approval, prior to the expiration of the Due Diligence Period and in Buyer's sole discretion, for any reason or no reason, of all matters pertaining to the physical, structural, electrical, mechanical, soil, drainage, environmental, economic, tenancy, zoning, land use and other governmental compliance matters and conditions respecting the Property, including without limitation the Due Diligence Items, all as provided in this Section . All references herein to the “Due Diligence Contingency” shall refer to the conditions benefiting Buyer that are described in this Section.
The closing of the sale of the Apartment Portfolio is subject to customary conditions, including the receipt of the approval of the Trust’s shareholders, and is expected to occur in the second calendar quarter of 2020. There is no financing or due diligence contingency.
If, during the Due Diligence Period, Buyer, in its sole discretion, is not satisfied with the results of its due diligence review of the Property for any reason or no reason whatsoever, Buyer shall have the right to terminate this Agreement by providing Notice to Seller prior to the expiration of the Due Diligence Period (the “Due Diligence Contingency”). If Buyer terminates this Agreement pursuant to the Due Diligence Contingency in accordance with this Section, then the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination. If Buyer does not terminate this Agreement pursuant to the Due Diligence Contingency in accordance with this Section 4.2(f), Buyer shall be deemed to have waived its right to terminate this Agreement pursuant to this Section.
Due Diligence Contingency. Notwithstanding anything to the contrary herein, Buyer’s obligation to purchase the Purchased Assets in accordance with this Agreement shall be subject to the condition that Buyer has determined, in Buyer’s sole discretion, that it is satisfied with its Due Diligence Review and desires to go forward with the purchase of the Purchased Assets under this Agreement (“Due Diligence Contingency”).
DUE DILIGENCE CONTINGENCY: At any time during Due Diligence Period, if BUYER is not satisfied for any reason whatsoever, BUYER shall have the option of canceling this Agreement by written Notice to SELLER and BROKER made no later than the last day of the Due Diligence Period under paragraph 9.1.
Due Diligence Contingency Period. Buyer, in Buyer’s sole and absolute discretion, may disapprove of the Property for any reason whatsoever, including, without limitation, the condition of the Property and the feasibility of Buyer’s intended use for the Property, during the period beginning on the Effective Date and ending at 5:00 p.m. EST on November 1, 2023 (such period, the “Contingency Period”). On or before expiration of the Contingency Period, Buyer may deliver written notice to Sellers disapproving the Property for any reason whatsoever. Buyer’s failure to deliver such disapproval notice shall be deemed approval of the Property. If Buyer disapproves the Property prior to the expiration of the Contingency Period in accordance with the terms hereof, (i) Buyer shall pay any cancellation or termination charges charged by the Title Agent, including, without limitation, any title search charges (together, the “Cancellation Charges”) of the Title Company (as defined below), and (ii) this Agreement shall automatically terminate and be of no further force or effect, and neither party shall have any further rights or obligations hereunder, other than pursuant to any provision hereof that expressly survives the termination of this Agreement. If Buyer fails to disapprove of the Property prior to the expiration of the Contingency Period in accordance with the terms hereof, this Agreement shall remain in full force and effect and Buyer shall have no further right to terminate this Agreement, in each case, except as expressly provided herein.
No Due Diligence Contingency: The purchaser acknowledges and agrees to the following: (a) The purchaser has completed its due diligence review of the seller's materials and all matters related to the property and the business as of the effective date. This includes structural, engineering, environmental, title, survey, financial, operational, and legal compliance matters that the purchaser deems necessary. (b) The purchaser does not have the right to terminate this agreement due to dissatisfaction with any aspect of its due diligence review of the seller's materials, the property, or the business. (c) The purchase price reflects the results of the purchaser’s due diligence review of the seller's materials, the property, and the business.
Due Diligence. Company shall have completed, on or before the filing of the S-4 and the Joint Proxy/Prospectus, its legal and financial due diligence regarding the Parent and its Subsidiaries, in each case, to the Company’s satisfaction (as determined by the Company in its sole and absolute discretion) (the “Due Diligence Contingency”).
A Due Diligence Contingency is a provision within a contract, typically related to real estate transactions or mergers and acquisitions, that allows a buyer to thoroughly investigate and assess the asset being acquired. This contingency gives the buyer the right to terminate or renegotiate the contract if the investigation results are unsatisfactory or reveal significant issues that affect the asset’s value or potential.
You should use a due diligence contingency in situations where a comprehensive evaluation of the asset is essential to your investment decision. This includes:
Utilizing a due diligence contingency provides a safeguard, ensuring that you have the opportunity to conduct necessary investigations and can adjust or withdraw your offer if the findings are not satisfactory.
When writing a due diligence contingency, clarity and specificity are key. Follow these steps:
Define the Scope: Clearly state the aspects of the asset or transaction that will be reviewed during the due diligence period. This may include financials, legal compliance, physical inspections, etc.
Set a Time Frame: Specify the duration of the due diligence period. It’s important to establish when the period begins and ends, often using terms like “business days” to avoid ambiguity.
Outline Termination Rights: Describe the conditions under which the buyer can terminate the contract based on due diligence findings. This should include procedural steps for notifying the seller.
Detail Negotiation Terms: If renegotiation is an option, specify the process and any contingencies applicable to revised terms.
Include Confidentiality Clauses: Ensure that the information gathered during the due diligence is kept confidential, protecting both parties’ interests.
Example: Buyer shall have a period of 30 business days from the Effective Date of this Agreement (the ‘Due Diligence Period’) to conduct inspections, surveys, reviews, and investigations of the Property. If Buyer determines, in its sole discretion, that the results of the Due Diligence are unsatisfactory, Buyer may terminate this Agreement by delivering written notice to Seller prior to the expiration of the Due Diligence Period…
Due diligence contingencies are commonly found in the following types of contracts:
Real Estate Purchase Agreements: Contracts for the purchase of residential or commercial properties often include a due diligence period for inspections and title reviews.
Merger and Acquisition Agreements: Contracts involving the sale or purchase of a business often include due diligence provisions to allow for a thorough examination of the company’s operations and finances.
Investment Agreements: Contracts related to significant investments in projects or new ventures may contain contingencies for due diligence to assess the feasibility and risks involved.
These contingencies are integral to ensuring that a transaction proceeds based on accurate and complete information, allowing the buyer to make informed decisions.
Try our AI contract analysis and extract important clauses and information from existing contracts.
< <
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The due diligence period in a contract is a designated timeframe during which the buyer is allowed to thoroughly inspect and evaluate the property or assets involved in the transaction. This period aims to ensure the buyer can identify any potential issues and make informed decisions before finalizing the agreement.
The "Duration of Confidentiality" clause specifies the time period during which parties involved are obligated to maintain the confidentiality of the disclosed information. This period may extend beyond the termination of the agreement, ensuring continued protection of proprietary information for a defined duration or indefinitely.
The duty to mitigate damages clause requires a party who has suffered a loss or injury to take reasonable steps to minimize the financial impact of that loss. Failure to mitigate can reduce the amount of compensation recoverable from the other party responsible for the breach or harm.
Fill out the form and we will get in touch with you to give you a personal, customized demo of fynk.
Greetings!
I'm Markus, co-founder of fynk. After you've submitted the form, I'll swiftly get in touch with you.
Also, right after you submit your details, you can pick a time that works best for you for our meeting.
