Question

A buyer purchased a single family dwelling in a subdivision using a land sales contract that provided for monthly payments and prohibited prepayment. Two years later the buyer decided to pay off the balance of the contract, but the vendor refused to accept it. Which statement is correct?

A)
The buyer can make equal monthly interest payments but can pay nothing on the principal before the due date.
B)
The buyer must abide by the terms of the land sales contract.
C)
The buyer can ignore the clause prohibiting prepayment and pay off the loan after two years.
D)
The inclusion of this clause makes the contract void.

Answer 1

The buyer must abide by the terms of the land sales contract.

Step-by-step explanation:

The correct statement in this situation is B) The buyer must abide by the terms of the land sales contract. When the buyer signed the land sales contract, they agreed to the terms and conditions outlined in the contract, including the prohibition of prepayment. While it may be frustrating for the buyer that the vendor refused to accept the payoff, the buyer is legally bound by the terms of the contract.