It is not very common, but often happens if the purchaser's attorney requests too many or too major changes to the contract of sale (which is usually authored by the seller's attorney). Anytime the buyers attorney requests changes to the contract it does give the seller the right to cancel the whole deal and owe the buyer nothing. It is for this reason that the buyer's attorney should not request changes unless they are absolutely neccessary.
In addition, with respect to the engineer inspection, if after said inspection the purchaser requests repairs and/or financial consideration based on the inspectors findings, the seller would have the right to refuse and/or cancel the whole deal. Again, a buyer should not request repairs or compensation after the inspection unless they are willing to lose the deal if they do not get them.
I hope this answers your question. If i can be of further assistance, please let me know.
Madison Estates & Properties, Inc.
Office: (718) 645-1665