Can the Back-Up Contract Addendum be used to create more than one back-up contract?

QUESTION: One of my listings is under contract, and today I received two back-up offers. Each of the back-up offers has the Back-Up Contract Addendum (Form 2A1-T) attached. Should my client sign both back-up offers and decide later which buyer to proceed with if the Primary Contract terminates?

ANSWER: No. When an offer containing a Back-Up Contract Addendum is signed and acceptance is communicated to the buyer or the buyer’s agent, a binding contract is formed. Form 2A1-T provides that if “the Primary Contract is terminated, Seller shall promptly provide Buyer the following two items: (a) written notice stating that [the] Back-up Contract has become primary; and (b) written evidence that the Primary Contract has been terminated as provided in paragraph 2[.]” If your seller signs both back-up offers as they are, they would be compelled to follow this mandatory language with each back-up buyer if the Primary Contract is terminated. This would result in the seller’s being under contract with two buyers for one property at the same time.

Form 2A1-T is only designed for one back-up contract. Your client should choose one back-up offer to accept. If they wish for the runner-up to become a second back-up contract, the seller should use an attorney-drafted addendum that makes it clear when Notice of Primary Status will be provided to the second back-up buyer.


© Copyright 2020 - 2024. North Carolina Association of REALTORS®, Inc.

This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.