Legal Question in Real Estate Law in California

That's the usual meaning and purpose of a "contingency" in a contract......performance by Party X is contingent upon satisfaction by Party Y or removal/waiver of the contingency by X. I'd advise some caution, however, in blowing off a purchase contract because the other party hasn't satisfied the contingency ....... make sure you have red and understood all the related terms and conditions of the agreement, that your action is still timely, and that you communicate your action as called for therein. Timeliness also means that the other party's time to comply has expired.

Yes. If the buyer has not removed a contingency within the time allowed, the seller can demand removal or cancellation. The buyer can cancel any time unless and until they have removed all contingencies. They buyer, however, is subject to the implied covenant of good faith and fair dealing. So they must act reasonably to remove contingencies that have been satisfied. For example if there is an inspection contingency and the inspection comes in clean with no defects that were not obvious at the time the contract was written, the buyer can't just use the contingency to back out of the contract because they've had a change of heart, by refusing to approve the inspection and remove the contingency. That would be bad faith, and a breach of the contract.

Anything is possible, and the terms of the Sales Agreement can be enforced, but escrow can not be cancelled without the approval and signature of buy and seller. Negotiate for whatever you want to accomplish, but unless escrow is cancelled the buyer does not get back any deposit and the property can not be put back on the market or sold to anyone else, since the title is 'clouded' by potential litigation. If serious about hiring counsel to help in this, and if this is in SoCal, feel free to contact me.