Staying on top of the deadlines in a sale and purchase contract is essential. Buyers and Sellers need to be aware of upcoming deadlines and be prepared to act on time, whether it’s accepting an offer, making a deposit, or closing. A missed deadline can have extreme consequences for your client.
In the FR/BAR contract, Standard F states that “time is of the essence in this contract.” That means any action under the contract MUST be completed by the stated deadline. (In the NABOR contract, time is of the essence for the closing date only.) Parties do not have a grace period or a chance to “cure,” or fix it, by acting after the deadline has passed.
If a contract states that “time is of the essence” for a particular deadline and the Buyer or Seller misses the deadline, then they have breachedthe contract. The other party has an immediateright to cancel and is NOT required to give notice of cancellation or grant any extensions. For Buyers, this breach would mean they forfeit any deposits they have already made. A Seller in breach would be required to return any deposits to the Buyer.
Don’t let this happen to your clients! Know the dates and deadlines in your contract and be sure your clients are ready to act on time. If you think you might have a contract where someone has missed a “time is of the essence” deadline or have any other questions, please feel free to contact me. I am reachable 24/7 at 239-784-5556 or [email protected].