“Time Is Of The Essence” is an legal expression that specifies the period of time during which a party must fulfill his contractual obligations towards the opposite. Failure to adhere to deadlines stipulated in the clause in a contract’s “time is crucial” clause is an infraction to the contract.
What Does “Time Is Of The Essence” Mean in Real Estate?
While you will find “time is essential” phrase in range of industry contracts, they are very prevalent in real estate contracts. In a real estate contract one can find a “time is of essential” clause provides a specific date for the parties to fulfill its obligations.
Even if the clause isn’t explicitly mentioned in an agreement the same principle can be applied in an “time is the most important thing” letter. To allow the “time is of essential” note to become considered valid before the court the letter should contain a reasonable timeframe with clear and precise stipulations as well as information regarding what happens in the event that the party fails to adhere to the timeline specified.
Any act that has to be completed within the period of time in an property transaction could be subject to the “time is of crucial importance” clause. Examples include notices, delivery of documents and termination methods, as well as closing dates. end date. A real estate contract must contain specific dates of completion for every time-dependent task involved in the process.
Inability To Meet The Timeline Is Of Importance Deadlines
If an “time is of crucial importance” clause is stipulated in an agreement, there will be penalties for failure to adhere to the deadlines.
As an example, suppose you signed the contract on December 1st 20th, 2020. The contract states that you’re required to provide an assessment of the property within three days. If you fail to provide an assessment of your property for the other person within three days, you could face consequences. The other party could require you to provide an additional survey or be subject to termination of the contract.
However, the laws regarding real estate differ from state to state. Be sure you are aware of the specifics of the contract prior to moving forward.
Standards of the ‘Time is Of The Essence Clause
The details surrounding the “time is of essential” clause could differ according to contract. However, the principle of openness between the parties is always mandatory. Here’s what you’ll find in a legal “time is of essential” clause.
1. Every Party Should Be aware of the Clause
In addition, all parties must know about that “time is of essential” clause. If any of the parties isn’t aware of the obligations under the clause, it is not enforceable. All parties who is involved in the transaction must know the timeline as well as the consequences for ignoring any deadlines.
2. All Parties Have The Right To “Reasonable” Postponement Of the Closing Day
Naturally, unexpected situations and issues can force an extension of the closing date. Any party can ask for an “reasonable” delay of the closing day. But, the other party must to consent to the new date for closing.
Because the deadline is legally binding and enforceable, failing in requesting a delay that results with a late deadline could be an infraction to the contract.
3. Amendment to a Breached ‘Time Is Of The Essence Clause
Even if one party is in violation of an agreement’s “time is of essential” clause, it’s possible to correct the mistake by amending the clause. If both parties do not agree to amend the clause that was breached the deadline missed could cause significant consequences.
