In an Alberta purchase contract, the completion day is set for a Friday, but the buyer's mortgage funds are delayed and will not be available until Monday. What are the legal consequences?
Correct Answer
A) The buyer is in breach, as time is of the essence, and may owe damages
AREA purchase contracts include a 'time is of the essence' clause, meaning all dates and deadlines must be strictly adhered to. If the buyer cannot complete on the specified completion day, they are in breach of contract. The seller may be entitled to late completion penalties, and in serious cases, may have the right to terminate the contract.
Why This Is the Correct Answer
AREA purchase contracts contain a 'time is of the essence' clause, meaning every date is a strict deadline. Under Alberta law, failure to complete on the specified day constitutes breach of contract. The seller may claim late completion penalties as specified in the contract and, in serious cases, may terminate the contract entirely.
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