There is usually a kickout clause with contingent offers. If a buyer wanted to submit an offer, they could do so but the first buyer would have a time period (24, 48 or even72 hrs) to drop their contingency. If they can't, then the contract becomes null and void and the seller is free to accept the new offer.
Did you ever find out what happened with that house? If not, I'd be glad to check on the status if you email me it to me:
RE/MAX Signature Properties