A Massachusetts purchase and sale agreement includes a time-is-of-the-essence clause for the closing date of March 15. The buyer fails to appear at closing on March 15 without notifying the seller or requesting an extension. The seller waits until March 20 before declaring the buyer in default and retaining the deposit. Under Massachusetts law, which statement best describes the effect of the time-is-of-the-essence clause?
Correct Answer
B) The time-is-of-the-essence clause makes the closing date a material term, so the buyer's failure to close on March 15 constitutes an immediate breach entitling the seller to declare default.
Under Massachusetts law, a time-is-of-the-essence clause makes the specified closing date a material term of the contract. When a party fails to perform on the specified date, that failure constitutes a breach, and the non-defaulting party may immediately declare the other party in default without providing additional time to cure. The buyer's failure to appear at closing on March 15 without excuse or extension is an immediate breach under the time-is-of-the-essence clause.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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