Is a home seller responsible if a home's HVAC breaks down before closing??

If an HVAC system is working when an offer is made, and during the final walkthrough, it’s discovered that it isn’t working - what are the implications?

Paragraph 11 of the standard offer to purchase states that if the property isn’t in substantially the same condition at Closing, the buyer has a choice of terminating the contract or proceeding with it.

If the buyer decides to terminate, they’re entitled to get their due diligence fee and earnest money deposit back, but not the due diligence costs.

If the Buyer does NOT elect to terminate this Contract the buyer would have the right to the proceeds of any insurance claim filed by Seller.

Lastly, if the seller wants the deal to go through, they have to be given the opportunity to repair the HVAC unit, and if they do, the buyer couldn’t terminate the contract without losing their deposits