Real Estate Contracts
What Is a Kick-Out Clause?
A kick-out clause (also called a release clause or 72-hour clause) is a contract provision that allows a seller to continue marketing their property after accepting a contingent offer. If the seller receives a better offer, they can give the original buyer a specified period — typically 72 hours — to remove their contingency or exit the contract.
Kick-out clauses are a common testing topic because they involve competing interests between buyers and sellers and require careful understanding of how contingencies interact.
How the Kick-Out Clause Works
Scenario
Seller accepts an offer contingent on the buyer selling their existing home. Rather than taking the home off the market entirely, the kick-out clause lets the seller continue showing the property to other buyers.
The 72-Hour Notice
When the seller receives a second acceptable offer, they notify the first buyer that they have 72 hours (or whatever period is specified) to either remove their home-sale contingency or release the contract and have their earnest money returned.
Buyer's Options
Remove the contingency (proceed without the protection of needing to sell their home first — risky if their home hasn't sold), or exit the contract and recover their earnest money. The buyer typically cannot extend the clock.
Why Sellers Use It
It allows sellers to accept a contingent offer without completely removing their property from the market. This keeps momentum in negotiations rather than waiting indefinitely for a buyer's home to sell.
Exam Key Points: Kick-Out Clause
Also called a release clause, 72-hour clause, or first-right-of-refusal clause in some contexts
Allows the seller to continue marketing despite an accepted contingent contract
The notice period (72 hours is common) is specified in the contract addendum
Buyer must remove the contingency OR exit — there is no third option during the notice window
If the buyer exits, their earnest money is returned — contingency protected the deposit
The kick-out clause must be in writing and agreed to by both parties
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