A buyer and seller execute a Nevada purchase agreement on April 1. The agreement has a closing date of May 15 and states that 'time is of the essence.' On May 15, the buyer requests a one-week extension due to a delay in the appraisal. The seller refuses and declares the buyer in default. Under Nevada contract law, which statement is most accurate?
Correct Answer
A) The seller's declaration of default is likely valid because the 'time is of the essence' clause makes the closing date a material term
When a Nevada purchase agreement contains a 'time is of the essence' clause, the specified dates become material terms of the contract. Failure to perform by the stated date constitutes a breach. Because the closing date of May 15 was made material by this clause, the seller's refusal to grant an extension and declaration of default is legally supportable. The buyer's reason for the delay (appraisal issues) does not automatically excuse performance under a time-is-of-the-essence contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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