By AAR Legal Counsel Michelle Lind, Esq.
Q: Does the Contract allow the buyer a “free look”?
A: No. A buyer and seller have legal duties to each other arising out of their contractual relationship, which includes the covenant of good faith and fair dealing. Lombardo v. Albu, 14 P.3d 288 (Ariz. 2000). An implied covenant of good faith forbids arbitrary action by one party that disadvantages the other. Therefore, even though the Contract allows the buyer to disapprove of items during the inspection period in the buyer’s “sole discretion, ” the buyer must act in good faith if the buyer furnishes a notice of cancellation because of disapproval of any items.
Note: “Contract” refers to the 2005 Arizona Association of REALTORS® (“AAR”) Residential Resale Real Estate Purchase Contract.
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