A purchase agreement in Meridian, Idaho contains a time-is-of-the-essence clause. The closing was scheduled for March 15. The buyer requested a one-week extension, but the seller refused. The buyer arrived at the closing table on March 22 with all funds ready. The seller refused to close. Which of the following best describes the seller's legal position?
Correct Answer
B) The seller may declare the buyer in default because the time-is-of-the-essence clause made March 15 a strict deadline
When a purchase agreement contains a time-is-of-the-essence clause, the specified closing date is a strict contractual deadline. The buyer's failure to close on March 15 — the agreed date — constitutes a material breach. The seller was not obligated to grant an extension and properly refused. With a time-is-of-the-essence clause, 'reasonable time' does not apply; the deadline is absolute.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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