Updated on April 24th, 2023
A backup offer addendum establishes that the purchase agreement it’s attached to is a backup offer and only becomes effective if the seller’s arrangement with another buyer is terminated. The document relays the terms under which the backup offer becomes effective or terminates. If the seller accepts any earnest money from the buyer, it will need to be refunded in the event the backup offer expires or the buyer cancels it.
BACKUP OFFER ADDENDUM
1. THE PARTIES. This Backup Offer Addendum (“Addendum”) made this [MM/DD/YYYY] is by and between:
Seller: [SELLER’S NAME] (“Seller”) and
Buyer: [BUYER’S NAME] (“Buyer”).
The Seller and Buyer are each referred to herein as a “Party” and, collectively, as the “Parties.”
2. ORIGINAL AGREEMENT. This Addendum is being added to the purchase agreement between the Parties, dated [MM/DD/YYYY], for the property located at [PROPERTY ADDRESS] (“Backup Contract”).
3. BACKUP CONTRACT. Buyer acknowledges that the Seller has already contracted to sell the property to another buyer based on a contract accepted on [MM/DD/YYYY] (“Primary Contract”).
The Parties agree to the following:
a) The Backup Contract is binding upon execution by the Parties, and any earnest money or option fee must be paid as provided in the Backup Contract. Backup Contract is contingent upon the termination of the Primary Contract. Except as provided by this Addendum, neither party is required to perform under the Backup Contract while it is contingent upon the termination of the Primary Contract.
b) An amendment or modification of the Primary Contract will not terminate the Primary Contract.
c) If the Primary Contract does not terminate on or before [MM/DD/YYYY], the Backup Contract terminates and earnest money will be refunded to Buyer. Seller must notify Buyer immediately of the termination of the Primary Contract. For purposes of performance, the effective date of the Backup Contract changes to the date the Buyer receives notice of termination of the Primary Contract (“Amended Effective Date”).
d) If Buyer has the unrestricted right to terminate the Backup Contract, the time for giving notice of termination begins on the effective date of the Backup Contract, continues after the Amended Effective Date and ends upon the expiration of Buyer’s unrestricted right to terminate the Backup Contract.
4. EXECUTION. This Addendum may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Seller’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [SELLER’S NAME]
Buyer’s Signature: ___________________ Date: [MM/DD/YYYY]
Print Name: [BUYER’S NAME]