Q. Is the 17-day inspection period under the C.A.R. standard form purchase contract RPA-CA really a “free look” permitting a buyer to cancel for any reason whatsoever?

A. Not really. Under California law, in every contract there is an implied covenant of good faith and fair dealing. This implied covenant is mutually binding on each of the contracting parties to prevent them from doing anything that would interfere with the right of the other party to receive the benefits under the contract that the parties reasonably contemplated when they entered into the agreement.

Thus, the buyer has an obligation to act in good faith. The 17-day inspection period gives the buyer the opportunity to inspect the property as well as the neighborhood conditions. Should the buyer discover a problem with the property that cannot be (or won’t be) repaired by the seller, then the buyer may cancel in good faith. However, a court ultimately makes the determination of whether the buyer was, in fact, acting in good faith.