Contingency clauses are quite common, and protect one of the a parties from harm in the event a certain circumstance or event occurs (or doesn't occur).  "The basic idea of a contingency clause is to give you the ability to terminate the agreement in the event certain expectations are not met.    These "escape clauses" are negotiated between the parties and can be for either party's benefit.

Contingency clauses can take many forms, and cover many topics, but a few of the most common are:

• Financing contingency
• Prior sale contingency
• Home inspection contingency: ie: Free of structural problems, material defects, defective appliances, etc.
• Intended use contingency:  ie: home office, multifamily residence, or business use.
• Attorney contingency
• Homeowners association contingency
• Appraisal contingency
• Deal specific contingency - ie: well passing certain water testing and soil reports.
 

Standard realtor contracts may contain some contingency clauses, but it is obviously always important that you make sure you include clauses to cover all your specific concerns.   But as a Buyer , keep in mind that the Seller ultimately decides whether to accept the contract with one or more contingency clauses.  The Seller's decision to do so typically tests not only on the nature of the contingency itself, but  also on the market demand for the property.   The hotter  the property, the less likely it is the Seller will accept contingencies.

Zero contingencies?   Beware of doing a deal without contingencies.  An agent advising you to make the deal with a "no contingency" offer might not be acting in your best interest.   You could be left with undiscovered property issues (and significant cost) after the deal is done and your agent has walked off with his or her commission.

What happens if the contingency is not met?  In some cases, the contract is cancelled.  In other cases, it is renegotiated.