If your seller is interested in entertaining a back-up contract offer, you need to ensure that the contract is clearly marked “Back-up Contract” or “Back-up Offer”. Mark this on the face of the contract preferably in the top margin. Also, set forth the status of the contract and the manner in which the contract becomes primary in paragraph 18.
“This contract is a back-up contract to the contract on the subject property between John Doe and Jane Roe dated February 14, 2016. This contract shall only become the primary contract if the aforementioned contract is terminated by the parties and written notice is provided to this buyer on or before March 15, 2016. Either party may terminate this back-up contract prior to the primary contract being terminated by providing written notification to the other party.”
In order to move from the primary contract to the back-up contract, the seller should get a release of contract signed by the primary buyer. Then notify the back-up contract buyer or agent in writing that the primary contract has terminated and that their contract is now primary.
If the seller does not have a signed release because the primary contract was terminated under the due diligence provision or there is a dispute over the earnest money, the seller may notify the back-up buyer that their contract is now primary without getting a signed release so long as they have written notification from the primary buyer that the contract is terminated. It is always advisable for the seller to contact an attorney to discuss all issues involved before doing so.
In all cases, notification to the back-up contract buyer should be in writing. Please note that once the Seller provides written notice to the back-up buyer, the contract is now binding.
Today’s historical fact: Pickens Street was named for General Andrew “Skyagunsta” Pickens. Pickens was one of three SC Partisan Generals in the American Revolution. He fought in the famous battles of Cowpens and Eutaw Springs in 1781. After the war he served fourteen years in the SC House of Representatives, four years in the SC Senate and two in U.S. Congress. He is buried at Old Stone Church near Pendleton, SC. Both his son and grandson served as Governor of South Carolina.