Tennessee Realtor State Practice Exam

In a commercial purchase and sale agreement, which paragraph describes the buyer's due diligence period?

1. Closing

2. Timeline

3. Inspection

4. Contingencies

The correct answer is: Inspection

In a commercial purchase and sale agreement, the paragraph that describes the buyer's due diligence period is the section related to inspection. This is because due diligence typically involves the buyer conducting inspections, evaluations, and assessments of the property to ensure it meets their expectations and criteria before finalizing the purchase. The inspection paragraph outlines the rights of the buyer to perform these due diligence activities, the time frame allowed for conducting inspections, and any conditions that may need to be satisfied as a part of this due diligence process. While other sections may touch on relevant matters, such as timelines for closing or specific contingencies that could affect the sale, the inspection paragraph is directly focused on the buyer's due diligence and the actions they must undertake to perform a thorough evaluation of the property.