Final answer:
The buyer has the right to terminate the Purchase and Sale Agreement if they are not satisfied with the due diligence results for a commercial property. Additionally, sellers can reassure buyers by offering warranties or service contracts to provide a sense of security over the condition and maintenance of the property. The correct option is D.
Step-by-step explanation:
If a Purchase and Sale Agreement for a commercial property includes a due diligence contingency for the buyer, then the buyer may terminate the Purchase and Sale Agreement if the buyer is not satisfied with the results of an inspection.
This contingency allows the buyer a specified period to conduct thorough due diligence, which may include inspections, reviews of financial documents, and any other necessary evaluations to ensure the property meets their requirements.
If issues are found during the due diligence period, the buyer typically cannot demand repairs or a second inspection; however, they can negotiate with the seller, or if they decide that the property is unsatisfactory, they are within their rights to terminate the contract before the contingency period expires.
To reassure a possible buyer facing imperfect information, sellers might offer a warranty, which is a guarantee to fix or replace the good for a certain time period. They can also provide the option to purchase a service contract, ensuring that any problems that arise for a set time period will be addressed.
These guarantees and contracts are frequently used for substantial purchases like cars, appliances, and houses to instill confidence in the buyer.