The buyer and seller entered into an Arizona REALTOR® Residential Resale Purchase Contract (Contract). After the inspection period, the buyer elected to cancel the Contract because of the COVID-19 pandemic.


Is the COVID-19 pandemic, in and of itself, a legal justification for canceling the contract?


See discussion.


Many buyers and sellers are uneasy with the economic and financial consequences flowing from the COVID-19 pandemic.  However, in Arizona, the county recorder’s offices remained open at all times.  Additionally, those in the real estate industry were deemed “essential” so that they could continue to operate.  Accordingly, real estate agents, title companies, lenders, appraisers and home inspectors continued to function, at least on a modified basis.  Therefore, the COVID‑19 pandemic did not make it impossible for parties to perform their contractual obligations.  As such, the COVID-19 pandemic does not legally justify the buyer (or seller) canceling an otherwise valid purchase contract. Note, if as a result of the pandemic, the buyer lost her job or experienced a substantial decrease in income, thereby resulting in a good faith denial of their loan, the buyer would be entitled to cancel pursuant to the financing contingency in the Contract.