What are "escape clauses" typically found in?

Escape clauses are provisions in contracts that allow one or both parties to exit the agreement under specific conditions or circumstances. They provide a way to mitigate risk and can include a variety of scenarios, such as the inability to obtain financing, unsatisfactory inspection results, or other contingencies that need to be satisfied for the contract to remain valid. This flexibility is crucial in real estate and other contractual agreements because it helps protect parties from being locked into unfavorable terms.

In contrast, while selling agreements, loan applications, and lease agreements may include various terms and stipulations, they do not inherently focus on the concept of allowing a party to exit based on defined conditions like escape clauses do. Understanding the function and purpose of escape clauses is important, especially in real estate transactions, where parties often need the option to withdraw from a deal if certain conditions are not met.