Donald and Lydia entered into signed, written contract for the sale of a yacht. Donald agreed to sell the yacht to Lydia for $1.2 million. The contract provided that the sale was required to close (be completed) on or before June 1. The contract further provided that the sale was conditioned upon

(1) Lydia obtaining a loan from a financial institution in the amount of $800,000 at an interest rate of 5% or lower;

(2) Donald must provide Lydia with an inspection report of the yacht by a certified boat inspector that certifies that the yacht has no material deficiencies; and

(3) Donald must provide Lydia with an appraisal of the yacht by a certified boat appraiser that appraised the yacht with a value of $1.3 million or more.

Which of the following is incorrect?

A. If the best loan that Lydia is able to obtain on or before June 1 is a loan for $600,000 at an interest rate of 6% Lydia will be in breach of the contract and must pay Donald damages for failing to perform.

B. If the yacht fails an inspection by a certified boat inspector Lydia will not be required to purchase the yacht.

C. Even if the yacht is not appraised at a value of $1.3 million Lydia could agree to proceed with the purchase of the yacht.

D. If Donald satisfies all of his conditions and Lydia is able to obtain an $800,000 loan with a 4.5% interest rate, Lydia must purchase the yacht for $1.2 million.