Independent Consideration Clause
(Commercial Purchase and Sale Agreement) (TX)

Summary

This independent consideration clause may be used in a commercial purchase agreement in Texas so that the purchase and sale agreement is not deemed to be an option contract if buyer has the right to terminate the agreement during its inspection period. This clause contains practical guidance and drafting notes. When a buyer has the right to terminate the purchase agreement during or at the end of its inspection period in its sole discretion, the purchase agreement is deemed to be an option contract since only the seller is bound to the purchase agreement. If the contract is deemed to be an option contract, the seller may revoke the option leaving the buyer exposed to risk that someone else may purchase the property while it is expending time and money conducting diligence. If independent consideration is stated and actually exchanged for the buyer's right to tie up the property while it conducts diligence, the purchase agreement will not be deemed an option contract, thus protecting buyer's interest. The capitalized terms and section references used in this clause should be conformed to the relevant purchase and sale agreement it is used in. For a Texas commercial purchase and sale agreement, see Commercial Purchase and Sale Agreement (Long Form) (TX). For guidance on the purchase and sale of Texas commercial real estate, see Commercial Real Estate Purchase and Sale Agreements (TX).