Forms

Forms

Time as of essence—Option, Am. Jur. Legal Forms 2d, Contracts § 68:240

An option contract is of such a nature that time generally is regarded as of the essence thereof, even in equity,[FN1] especially where it is expressly made so,[FN2] or where the property involved is of a speculative or fluctuating value.[FN3] An optionee must exercise utmost diligence in performing the terms of the option within the specified time.[FN4] There may, however, be provisions in an option contract relating to matters other than the acceptance of the option as to which time is not of the essence.[FN5]

FOR EDUCATIONAL USE ONLY

61 Am. Jur. Proof of Facts 3d 325

American Jurisprudence Proof of Facts 3dDatabase updated August 2009

Categorical List of Articles

Circumstances Making Time of the Essence in Performance of Real Estate Contract[FN*]

Mark S. Dennison, J.D.[FN**]

ARTICLE OUTLINE

I Legal BackgroundA In General§ 1 Introduction; scope of article§ 2 Time as of the essence—General rules§ 3 Effect of time of essence on rights of contracting parties; posture of case§ 4 Intent of parties as to whether time made of the essence; admissibility of parol evidenceB Contracts With Express Provision Making Time of Essense§ 5 Circumstances where time made of the essence by express provision in contract§ 6 Application of time of essence provision where neither party tenders performance by stated

time§ 7 Application of time of essence provision where defaulting party's nonperformance caused by

conduct of other party§ 8 Waiver of time of essence clause in contract§ 9 Restoration of time of essence clause following prior waiver

§ 10 Effect of extension of time of performanceC Contracts Without Express Provision Making Time of Essence§ 11 Circumstances where time made of the essence despite absence of express provision in

contract§ 12 Reasonable time allowed to perform where time not made of the essence§ 13 Waiver or extension of time set for performance§ 14 Subsequent notice making time of the essence§ 15 Subsequent notice making time of the essence—Reasonableness of time set for performance

in default, destroying purchaser's right to specific performanceD Options to Purchase§ 16 Time as of the essence in exercise of option to purchase realty§ 17 Time as of the essence in exercise of option to purchase realty—Circumstances excusing

optionee's failure to give timely notice of exercise of optionII Elements of Proof§ 18 Proof of intent to make time of the essence in performance of real estate contract; checklistIII Model Pleadings§ 19 Sample Complaint of real-estate seller in action based on purchaser's failure to tender

performance by closing date—Alleging subsequent notice making time of the essence§ 20 Sample Answer and Counterclaim of purchaser with affirmative defenses, including seller's

waiver of time set for closing, and seeking specific performance of real estate contractIV Proof of Intent of Parties to Make Time of the Essence in Mortgage Loan CommitmentA Testimony of Plaintiff-Borrower§ 21 Borrower's purpose in making contract§ 22 Lender's knowledge of borrower's purpose§ 23 Terms of agreement relating to time of performance§ 24 Significance of timely performance§ 25 Lender's failure to grant borrower's request for extension of time§ 26 Borrower's request to fix time and place for performance§ 27 Borrower's prompt repudiation of contract following defaultV Proof of Insufficiency of Seller's Notice Making Time of EssenceA Testimony of Defendant-Seller (Adverse Witness)§ 28 Description of property§ 29 Execution of contract; absence of provision making time of essence§ 30 Lack of intent to make time of the essence§ 31 Extension of closing date; seller's notice making time of essence§ 32 Seller's refusal to grant adjournment of extended closing date§ 33 Seller's lack of good faithB Testimony of Plaintiff-Purchaser§ 34 Relationship between parties§ 35 Offer and acceptance§ 36 Execution of real estate contract§ 37 Closing date specified in contract; absence of time of essence clause§ 38 Purchaser's understanding that time not of essence§ 39 Special arrangements made to accommodate seller§ 40 Purchaser's request for extension of closing date§ 41 Seller's notice making time as essence

§ 42 Purchaser's request for further extension§ 43 Purchaser's ability to perform within reasonable period of time from seller's notice§ 44 Seller's notice of default§ 45 Purchaser's rejection of default notice; tender of performance rejected by sellerVI Model Jury Instructions§ 46 Waiver of time of essence clause in real estate contract§ 47 Waiver of strict compliance with closing date§ 48 Defaulting party's nonperformance caused by conduct of other party

INDEX

Absence of time of essence clause, §§ 29, 37Acceptance of offer, § 35Accommodating seller, special arrangements, § 39Additional extension of closing, §§ 14, 42Adjournment of extended closing date, refusal, § 32Admissibility, parol evidence, § 4Adverse witness, defendant seller, §§ 28– 33Ambiguity, parol evidence, § 4Answer and counterclaim, § 20Background discussion of subject matter, §§ 1– 17Bad faith, seller, § 33Borrower's intent in making contract, § 21Both parties' default, § 7Cause of default, other party, §§ 7, 48Certainty and definiteness, § 4Checklist, proof elements, § 18Circumstances invoking time of essence, generally, § 2Clause as to time of performance, borrower's testimony, § 23Closing date, §§ 31, 32, 37, 40, 42Complaint, realty seller, § 19Counterclaim in answer, § 20Damages, liquidated, § 15Default and notice of default, generally, §§ 3, 5, 7, 15, 44, 45, 48Defendant seller's testimony, adverse witness, §§ 28– 33Defense, time of essence as, § 3Definiteness and certainty, § 4Definitions, § 2Denying extension request, §§ 23, 32Description of property, § 28Equitable remedies, §§ 15, 20Excusing untimely notice of option exercise, § 17Execution of contract, §§ 29, 36Express provision in contract, §§ 2, 5Extension of time generally,, § 13

contract terms,, § 23 denial,, §§ 25, 32 effect,, § 10 further extension,, § 42 lender's denial,, § 25 reasonableness of time for performance,, § 15 request,, §§ 25, 40, 42 seller's refusal,, § 32 subsequent notice making time of essence,, §§ 14, 31Failure of performance, both parties, § 5Fault affecting enforcement, § 7Forms

jury instructions,, §§ 46– 48 pleadings,, §§ 19, 20Further extension of closing, §§ 14, 42Good faith, seller lacking, § 33Implied time of essence, §§ 11– 15Importance timely tender, borrower's testimony, § 23Inducing breach, §§ 7, 48Instructions to jury, §§ 46– 48Intent of parties, §§ 4, 11, 18, 21– 27, 30, 37Jury instructions, §§ 46– 48Knowledge or notice, §§ 10, 14, 17, 19, 22, 28– 45Lender's knowledge of borrower's purpose, § 22Liquidated damages, down payment, § 15Marketable title, delay, § 8Meeting of minds, §§ 13, 38Model jury instructions, §§ 46– 48Model pleadings, §§ 19, 20Mortgage contract, § 11Mutual default, § 7Neither party tenders performance on time, § 5Nonperformance, generally, §§ 3, 5, 7, 15, 44, 45, 48Notice and knowledge, §§ 10, 14, 17, 19, 22, 28– 45Novation following waiver, § 9Offer and acceptance, § 35

Open-ended option, exercise, § 16Options to purchase, §§ 16, 17Parol evidence showing intent, §§ 4, 11Performance ability, reasonable time, § 43Performance tender, rejecting, § 45Place of performance, borrower's request, § 26Plaintiff's testimony, §§ 34– 45Pleadings, §§ 19, 20Prompt repudiation following default, borrower, § 27Purchase options, §§ 16, 17Purchaser's testimony, §§ 34– 45Purpose of contract, borrower's intent, § 21Ratification waiving breach, § 8Reasonable time to perform, §§ 2, 3, 12– 15, 43Refusing tender of performance, § 45Rejecting notice of default, § 45Relationship between parties, purchaser's testimony, § 34Repudiation, §§ 8, 27Request for extension, §§ 23, 32, 40, 42Request to set time and place to perform, borrower, § 26Restoring time of essence following waiver, § 9Retroactive notice, time of essence, § 14Rules, general, time of the essence, §§ 2, 16Scope of article, § 2Seller's notice making time of essence, sufficiency, §§ 27– 45Seller's testimony, adverse witness, §§ 28– 33Setting time and place of performance, borrower's request, § 26Significance of timely tender, borrower's testimony, § 23Signing contract, §§ 29, 36Silence as waiver, options, § 17Special arrangements accommodating seller, § 39Specific performance, §§ 3, 15, 20Subsequent notice, time of essence, §§ 14, 19Sufficiency of notice making time of essence, §§ 27– 45Tender of performance, §§ 5, 45Time of essence, general rules, § 2Title marketability, delay, § 8Waiver, §§ 8, 9, 13, 17, 20, 46, 47

Topic of Article:

Whether the parties to a real estate contract intended to make time of the essence in performance of the agreement. This fact question arises in cases where either the seller or the purchaser claims that the other party is in default for failure to tender performance by an agreed time. Although time of the essence may be asserted by one of the parties as an affirmative basis for declaring the other party in default, it is more frequently asserted by one of the parties as a defense to the other party's action for specific performance or breach of contract. The determination as to whether time was made of the essence in performance of the contract can have a significant impact on the parties' claims for relief under the contract and requires a case-by-case analysis of the particular facts and circumstances involved. This article explains the relevant rules of law and evaluates the proof necessary to establish that time was, or was not, made of the essence in the performance of a real estate contract.

I. Legal Background

A. In General

§ 1. Introduction; scope of article

[Cumulative Supplement]

Under the terms of a real estate contract, various obligations are imposed upon the purchaser and seller with which they must comply or be susceptible to possible legal action by the other party for breach of the agreement. The purchaser's primary responsibility is payment of the purchase price—whether due in full by a specified closing date, or in installments according to a payment schedule—so that if the purchaser defaults on this obligation, the seller may file suit for specific performance or bring an action for damages, rescission, forfeiture and possession, or a decree quieting title, depending on the particular circumstances. Likewise, numerous duties and obligations may be imposed upon the seller under a typical contract for the sale of real property, including delivery of the deed of conveyance at a certain time and place, delivery of a complete abstract of title by a certain date, and the delivery of marketable title to the property in fee simple. The seller's performance of these and other contractual obligations is an essential part of the agreement and, as in the case of a purchaser's default, the seller's failure to perform in accordance with its terms may subject the seller to suit for specific performance or breach of contract.

Where an action is brought against one of the parties for nonperformance of his or her contractual obligations, the question often arises as to whether the parties intended to make time of the essence with regard to performance of certain terms of the agreement. As will be explained in this article, the determination as to whether time was made of the essence in performance of the contract can have a significant impact on the parties' claims for relief under the contract and requires a case-by-case analysis of the particular facts and circumstances involved. This article explains the relevant rules of law and evaluates the proof of facts necessary to establish that time was, or was not, made of the essence in the performance of a real estate contract.

The article commences with a discussion of the general rules concerning the concept of time of the essence in performance of real estate contracts,[FN1] the effect of time of the essence on the rights of the contracting parties, and the posture of actions in which time of the essence is asserted.[FN2] The intent of the parties as to whether they made time of the essence, and the admissibility of parol evidence to establish that intent, is then examined.[FN3] Next, the article analyzes the proof of facts necessary to establish that time was, or was not, made of the essence in the performance of a real estate contract under the particular circumstances where the contract contains an express provision making time of the essence,[FN4] and circumstances where the contract does not contain such an express provision.[FN5] Also explained are the rules concerning the making of time of the essence in the case of options to purchase real estate.[FN6] With regard to contracts with an express provision making time of the essence, the article examines the general rules concerning the effect of inclusion of such an express provision in the contract,[FN7] then proceeds to evaluate application of time of the essence clauses in different factual settings, including situations where neither party tenders performance by the stated time,[FN8] where the defaulting party's nonperformance is caused by the conduct of the other party to the contract,[FN9] where the time of the essence clause had been waived by conduct of the parties,[FN10] where the time of the essence clause has been reinstated following a prior waiver,[FN11] and where an extension of time had been granted for performance.[FN12] With regard to contracts without an express provision making time of the essence, the article examines the general rules concerning the absence of an express provision in the contract,[FN13] then proceeds to evaluate particular circumstances indicative of whether the parties intended to make time of the essence in spite of the absence an express provision, including the effect of a waiver or extension of time set for performance,[FN14] and situations where one of the parties gives subsequent notice to the other, setting a new date for performance and stating that time is of the essence.[FN15] In addition to the foregoing, a helpful checklist of the elements of proof necessary for establishing whether or not the parties intended to make time of the essence in performance of a real estate contract is provided.[FN16]

A set of model pleadings is also provided for illustrative purposes—a real-estate seller's complaint in an action based on the purchaser's failure to tender performance by a stated closing date and alleging subsequent notice making time of the essence, and the corresponding answer and counterclaim by the purchaser, including the affirmative defense that the seller waived the time set for closing.[FN17] Sample testimony is then provided from two illustrative fact patterns involving contracts without an express provision making time of the essence. In the first one, in which the plaintiff-borrower and defendant-lender have executed a mortgage loan commitment, the testimony of the borrower provides facts for establishing that the parties intended to make time of the essence in performance of the contract, and that as a result of the lender's failure to perform by the date specified for closing, the borrower is entitled to hold the lender in default, rescind the agreement, and recover his security deposit.[FN18] In the second fact pattern, an action for specific performance of a real estate contract, testimony of the defendant-seller, as adverse witness, and testimony of the plaintiff-purchaser is presented to establish that a notice from the seller was insufficient to make time of the essence because it did not afford the purchaser a reasonable amount of time to tender performance.[FN19] Finally, several model jury instructions concerning whether time was made of the essence as to the closing date in a real estate contract are provided.[FN20]

CUMULATIVE SUPPLEMENT

Trial Strategy

Real Estate Broker's Recovery of Commission When Buyer or Seller Defaults on Contract of Sale, 91 Am. Jur. Proof of Facts 3d 1

Cases:

Evidence supported trial court's finding that purchaser exercised his termination right in time allowed by contract for purchase of real estate, predicated on finding that parties to contract did not intend to make time of the essence; parties did not include phrase "time is of the essence" in contract, termination subparagraph contained varying time periods, and court found that the parties orally, and then in a subsequent writing, agreed to extend 30-day time restriction of the contract. Tulisano v. Schonberger, 74 Conn. App. 101, 810 A.2d 806 (2002); West's Key Number Digest, Vendor and Purchaser 84.

Contract for sale of real estate, which did not contain a "time is of the essence" clause, remained in force until closing. Heilman v. Repp, 768 So. 2d 1144 (Fla. Dist. Ct. App. 4th Dist. 2000); West's Key Number Digest, Vendor and Purchaser 75.

Absent a time-is-of-the-essence clause, parties to a realty purchase agreement are allowed a reasonable time after the date set for closing to complete performance. Dishner Developers, Inc. v. Brown, 549 S.E.2d 904 (N.C. Ct. App. 2001); West's Key Number Digest, Vendor and Purchaser 75.

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§ 2. Time as of the essence—General rules


The basic meaning of the phrase "time is of the essence" is that performance by the time specified in the contract, or a time otherwise agreed upon by the parties, is an essential component of the contract, which gives one party the right to hold the other party in default for failure to tender performance in strict compliance with the time constraints of the agreement. In cases involving the issue, whether time was made of the essence in the performance of a real estate contract, most courts espouse the general view that time is ordinarily not considered to be of the essence of a contract unless the parties have evinced a clear intention to make it so, either by express stipulation in the contract itself,[FN1] or by implication from the conduct of the parties and the surrounding circumstances.[FN2] It is well-established that time is not of the essence of a contract to convey land unless made so by its terms expressly or by implication from the nature of the subject matter, the object of the contract or the situation or conduct of the

parties.[FN3] When the contract does not include a provision that time is of the essence, the law implies that it is to be done within a reasonable time.[FN4]

Even where the contract calls for payment at a specific time, time is generally not regarded as being of the essence in a contract for the sale of land, unless some other language indicates that the time specified for payment is of the essence. Payment or conveyance at the exact time specified in a real estate contract is generally not regarded as of the essence because "the injury caused by delay is little or nothing. Delays are frequent in these transactions; and it is the custom of [people] to overlook them, even though they may have stated in advance that they would not."[FN5] A specific date set for closing is usually treated more as a goal, and not as a deadline.[FN6]

Nevertheless, while in the typical contract for the sale of real estate, time is not regarded as being of the essence, time may be made of the essence if so provided in the agreement itself, or if such an intent is clearly manifested by the agreement when construed in light of the surrounding circumstances.[FN7] Thus, a party to a real estate contract may prove that time was made of the essence either by (1) the express terms of the instrument, or (2) evidence of circumstances establishing that the parties intended time to be an essential element of the contract.[FN8]


Cases:

Under South Carolina law, purchaser's failure to sign a "time is of the essence" clause did not invalidate a contract for the sale of real property; the purchaser presented undisputed testimony that he understood the vendor's position that it was very important to close timely, and his actions, including depositing $5,000 into an escrow account and contacting a bank with respect to a mortgage, evidenced his prompt efforts to comply with the contract's closing date. Shay v. Austin, 466 F. Supp. 2d 664 (D.S.C. 2006); West's Key Number Digest, Vendor and Purchaser

23.Materiality of breach: A failure to close by the specified closing date in a sales contract that

declared time to be of the essence is a material breach that terminates a defaulting party's right to enforce the contract. In re New Breed Realty Enterprises, Inc., 278 B.R. 314 (Bankr. E.D. N.Y. 2002); West's Key Number Digest, Vendor and Purchaser 185.

Time for closing need not be specified: Length of escrow period, which was unspecified in purchase-option provision of residential lease, was not a necessary term for a contract for sale of real property, and thus, failure to specify the length of escrow period did not constitute uncertainty regarding a necessary term which would preclude the equitable remedy of specific performance of the purchase option. Patel v. Liebermensch, 45 Cal. 4th 344, 86 Cal. Rptr. 3d 366, 197 P.3d 177 (2008); West's Key Number Digest, Specific Performance 28(2).

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§ 3. Effect of time of essence on rights of contracting parties; posture of case


Time of the essence may be asserted by one of the parties as an affirmative basis for declaring the other party in default, or, as is more frequently the case, may be asserted by one of the parties as a defense to the other party's action for specific performance or breach of contract. Cases involving the question of whether time was made of the essence in the performance of a real estate contract typically take one of the following postures:• Time of essence asserted by seller as defense to purchaser's action for breach of contract[FN1] • Time of essence asserted by seller as defense to purchaser's action for specific performance[FN2] • Time of essence asserted by seller as basis for declaring purchaser in breach of contract[FN3] • Time of essence asserted by seller as basis of action for forfeiture or strict foreclosure[FN4] • Time of essence asserted by purchaser as basis for declaring seller in default and justifying rescission and/or return of down payment[FN5] • Time of essence asserted by purchaser in defense of seller's action for breach of contract[FN6]

A determination of whether time was made of the essence can have a significant impact on a party's claim for relief under the contract. In particular, where the evidence shows that the parties clearly intended to make time of the essence, either by express terms of the contract or by clear implication from the surrounding circumstances, failure to perform by a specified date automatically constitutes a default, whereas where the evidence establishes that time was not made of the essence, the parties are generally afforded a "reasonable" period of time to perform before a default may be declared, notwithstanding that the contract sets forth a specific date for performance.[FN7]

It should be mentioned that a contractual provision stating in general terms that time is of the essence will ordinarily apply to the obligations of both parties.[FN8] Courts are reluctant to enforce such a clause against the purchaser alone and are more likely to hold that it applies to the seller's contractual obligations as well. However, although a stipulation in an executory contract that time is of its essence may be for the benefit of both the seller and the purchaser,[FN9] whether or not it will be so construed must be determined from a consideration of the contract as a whole.[FN10]


Cases:

To determine whether purchaser preserved his right to specific performance, "time is of the essence" clause in contract for the purchase of real property only required trial court to evaluate whether purchaser was willing and able to close the transaction at the time set for closing, rather than whether purchaser performed; terms of financing required purchaser to have a three-day right to rescind the loan agreement and that funds for purchase were be placed in escrow for three days, and vendors failed to appear at closing. Clark v. Scena, 83 P.3d 1191 (Colo. Ct. App. 2003); West's Key Number Digest, Equity 93.

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§ 4. Intent of parties as to whether time made of the essence; admissibility of parol evidence

Although the courts at one time espoused the view that time is of the essence of a contract for the sale of land, even in the absence of a particular provision expressly making it so, and even though the contract does not otherwise clearly indicate that it was the intent of the parties that time should be of the essence,[FN1] the modern view is to regard the question as one of construction of the intent of the parties and to hold that time is not of the essence of the contract unless made so by express stipulation or unless there is something connected with the purpose of the contract and the circumstances surrounding it to make it apparent that the parties intended that the contract must be performed within the time stated.[FN2] To make time essential in a land sales contract, the parties must clearly stipulate their intention that time is of the essence in the contract,[FN3] or, absent such express stipulation, it must clearly appear that the parties intended that time should be of the essence.[FN4] The intention of the parties may be manifested by the language of the contract as a whole, construed in the light of the surrounding facts,[FN5] and by the actions of the parties.[FN6]

Where a land sales contract states a time for its performance but there is no express or implied statement of whether time is of the essence, parol and extrinsic evidence is admissible to show the intent of the parties as to whether time was made of the essence.[FN7] On the other hand, where there is an express stipulation in the contract that time is of the essence, courts generally consider such a statement to be unambiguous and refuse to admit parol evidence to refute it and so vary the terms of the written contract.[FN8] Other courts, however, take a more liberal approach and will consider evidence of the intent of the parties, notwithstanding that the contract contains an express stipulation that time is of the essence.[FN9] In one case, where a land sales agreement provided that time was to be of the essence unless extended by mutual agreement, and the settlement time was extended by verbal agreement for two weeks, the court held that parol evidence was admissible to prove that the agreement was at an end following the expiration of the second deadline.[FN10]

B. Contracts With Express Provision Making Time of Essense

§ 5. Circumstances where time made of the essence by express provision in contract


Where it clearly and unequivocally appears from the contract, by means of some express stipulation, that time shall be essential, this expressed intention of the parties as to the time of performance or compliance with the terms of the contract will be regarded as of the essence.[FN1] In such a case, notice to perform need not ordinarily be given, nor a reasonable time elapse following default, before forfeiture or rescission may be declared.[FN2] Furthermore, where time is made of the essence by express stipulation in the contract, a seller may properly refuse to grant the purchaser an extension of time in which to perform and immediately file suit against the purchaser for damages for breach of contract.[FN3]

As stated by New York's highest court in one case, "[w]hen a provision that time is to be of the essence is inserted in a real property contract, the date established as the law day takes on

especial significance" and "each party must tender performance on law day unless the time for performance is extended by mutual agreement."[FN4] A time of the essence clause is "not a stock phrase" but is intended to give the parties an immediate right to cancel the contract if the other party fails to tender timely performance.[FN5] Where the parties have by their agreement expressly made time of the essence, failure to perform on the specified date automatically constitutes a default,[FN6] and no notice of such default is required.[FN7]

Nevertheless, the mere fact that an agreement declares time to be of the essence does not necessarily make it so; it is only one of many factors to be considered.[FN8] Many courts also will consider evidence of the intent of the parties,[FN9] and the surrounding circumstances,[FN10] such as fluctuating property values, and whether the parties have extended performance to a time certain.[FN11] In one case, the court found that time was made of the essence as to the closing date in a purchase and sale agreement where a letter of intent expressly stated that time was of the essence and the agreement referred to the letter of intent and incorporated it by reference into the agreement.[FN12]Case Illustration: In a Washington case, where the real estate contract expressly stated that time was of the essence, the court held that the contract expired of its own terms when neither party tendered performance by the specified closing date.[FN13] The plaintiff-purchaser offered an earnest money agreement to purchase certain commercial property from the defendant-seller for the sum of $65,000 cash. The agreement provided (1) for a closing date "not later than May 31, 1978, which shall be the termination date"; and (2) "time is the essence of this agreement." On April 20, 1978, the seller accepted the offer, but the parties amended the agreement by making it subject to the seller's receipt of a good and sufficient deed from the bankruptcy court to pass title to the purchaser, and by changing the closing date to June 30, 1978. On June 28, the agreement was mutually amended to provide a new closing date "not later than July 31, 1978." In late July, the purchaser sought another amendment to extend the closing date to August 31, 1978, but the seller refused to agree to this extension, even though an extension was necessary because the bankruptcy court had not yet released title to the purchaser. The purchaser sought a decree of specific performance requiring the seller to convey the property if and when the seller obtained marketable title to the property. Concluding that the purchaser had waived timely performance of the agreement by the seller, the trial court entered a decree of specific performance for the purchaser, requiring the seller to convey the property upon the purchaser's payment of the purchase price if and when the seller obtained marketable title to the property. On appeal, the appellate court reversed, holding that the purchaser could not waive the time of the essence clause in the contract because it was for the mutual benefit of both parties. Thus, the court ruled that because the contract contained a time of the essence clause, the agreement expired of its own terms when neither party tendered performance by the extended closing date of "not later than July 31, 1978" specified in the last amendment to the contract. Noting that the mere fact that an agreement declares time to be of the essence does not necessarily make it so, and that it is only one of many factors to be considered, the court concluded that the fact that all extensions of the closing date were for a limited time, coupled with evidence of the rapid increase in the property's value from $65,000 to $90,000 within a few months of the seller's receipt of another offer, indicated that time was clearly of the essence in performance of the agreement.


Cases:

Scope of cure clause: Contracts for the sale of real property were terminable due to purchaser's failure to timely deliver the deposit; contracts clearly provided that time was of the essence for purchaser to meet its monetary obligations, and five-day notice to cure contractually required of vendor as a condition of contract termination was not applicable where termination was predicated on nonpayment of the deposit. Baystone Equities, Inc. v. Gerel Corp., 305 A.D.2d 260, 759 N.Y.S.2d 78 (1st Dep't 2003); West's Key Number Digest, Vendor and Purchaser 93.

Letter from vendor's attorney to purchaser's attorney stating that closing would take place "on or prior to" stated date did not make time of the essence, especially in light of fact that stated date failed to afford purchaser reasonable time within which to close on parties' contract, and thus vendor's refusal to close on subsequent date constituted breach, entitling purchaser to specific performance. Kevan v. Modesta, 292 A.D.2d 348, 738 N.Y.S.2d 382 (2d Dep't 2002); West's Key Number Digest, Specific Performance 65.

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§ 6. Application of time of essence provision where neither party tenders performance by stated time

When a contract expressly provides that time is of the essence and fixes a termination date, the time of the essence provision is for the benefit of both parties (unless the agreement expressly or impliedly makes the provision solely for the benefit of one of the parties), and requires the agreement of both parties to change the termination date.[FN1] Thus, if the agreement makes time of the essence, fixes a termination date, and there is no conduct giving rise to estoppel or waiver, the agreement becomes legally defunct upon the stated termination date if performance is not tendered by either party.[FN2]

The failure of both parties to perform does not leave the contract open for an indefinite period so that either party can tender performance at his or her leisure.[FN3] The failure of both parties to perform during the time for performance results in a discharge of the duties of both parties to perform.[FN4] As one court has observed, "if time is made essential by the agreement, neither the vendor nor the purchaser can enforce the contract specifically after the agreed day if it is then still wholly executory on both sides … once the termination date expires, in the absence of an existing waiver or estoppel the agreement is dead."[FN5] However, if one of the parties tenders performance on the specified closing date and demands performance by the other party, who is unable or refuses to perform, the contract does not expire of its own terms; rather, the performing party may assert a claim against the nonperforming party for breach of contract.[FN6] Furthermore, these same rules apply in situations where the parties agree to extend the

closing date in the contract and neither party tenders performance by the extended closing date.[FN7]Case Illustration: In a California case, the court dismissed the plaintiff-purchaser's action for breach of contract against the defendant-seller, holding that because time was made of the essence of the contract, the failure of both parties to tender performance by the closing date, discharged both from performing.[FN8] The purchaser entered into an agreement to purchase a 56-acre parcel of land from the seller for $250,000 and made a deposit into escrow of $1,000. The contract, dated November 24, 1987, required that the purchaser deliver into escrow a further deposit of $24,000 and a note secured by a deed of trust to cover the balance of the purchase price, and required that the seller deliver a recordable deed into escrow. The contract stated that the closing of escrow was to take place within 30 days and expressly provided that "time is of the essence." About the second week of December, the seller gave a signed copy of the deed to the property to the purchaser for delivery to escrow. The escrow company pointed out, however, that the deed had not been notarized. When the purchaser contacted the seller, she told him that she would have it notarized at an escrow company near her home. The December 24 closing date came and went, without the seller tendering a notarized deed and without the purchaser tendering the $24,000 deposit or the promissory note and deed of trust. In March 1988, the seller told the purchaser that she now wanted $10,000 per acre for the property. In May 1988, after the seller told the purchaser that she had entered into a contract with other purchasers to buy the property for $600,000, the purchaser wrote a letter demanding that she perform on his contract, but she sold the property to the other buyers. Dismissing the purchaser's breach of contract claim, the trial court found that the purchaser was himself in default for failing to tender the purchase money note and deed of trust by the closing date, and that since time was of the essence of the contract, and neither party tendered performance, both parties were discharged from the contract. On appeal, the purchaser argued that his obligation to tender the promissory note and deed of trust and the seller's obligation to deliver a recordable deed were concurrent conditions, and that unlike the failure to perform a condition precedent, the failure of both parties to perform concurrent conditions did not automatically terminate the contract, but that one party must tender performance before the other party is in default. Rejecting the seller's argument, the appellate court explained that concurrent conditions are conditions precedent which are mutually dependent, and the only important difference between a concurrent condition and a condition precedent is that the condition precedent must be performed before another duty arises, whereas a tender of performance is sufficient in the case of a condition concurrent. The court explained that the failure of both parties to perform concurrent conditions does not leave the contract open for an indefinite period so that either party can tender performance at his leisure. Rather, the failure of both parties to perform concurrent conditions during the time for performance results in a discharge of both parties' duty to perform. Thus, held the court, where the parties have made time the essence of the contract, at the expiration of time without tender by either party, both parties are discharged, neither party can hold the other in default, and no cause of action to enforce the contract arises.

§ 7. Application of time of essence provision where defaulting party's nonperformance caused by conduct of other party

Ordinarily, a contract for the sale of land containing a clause that "time is of the essence" must be performed by the date fixed in the contract or the contract is no longer viable.[FN1]

"This general rule is, however, subject to the limitation that such a contract may nevertheless be specifically enforced if the failure to perform within the designated time results from the act or fault of the party against whom specific performance is demanded."[FN2] This exception is supported by the well-recognized principle that a person should not profit by his or her own wrong, and thus no person can defend against contractual liability on grounds of a condition precedent when he or she is responsible for that condition precedent not being complied with.[FN3] For example, under circumstances where the purchaser's delay in performance was caused by the conduct of the seller, the courts have noted that the seller should not be permitted to rely on the time of the essence clause to cancel the contract and thereby take advantage of an appreciation in real estate values.[FN4]

A party's failure to comply with the time limit specified in a real estate contract is excused in spite of a time of the essence clause where the delay is the result of the other party's bad faith or lack of due diligence.[FN5] Accordingly, where a contract expressly states that time is of the essence—such that performance by the purchaser within a specified time is a condition precedent to the seller's duty to perform his part—and the purchaser has been caused to delay his performance beyond the specified time by the request or agreement or other conduct of the seller, the purchaser can enforce the contract in spite of the seller's delay.[FN6] However, this rule assumes that the nonperformance of the condition was not caused by purchaser's own inability to perform, and that but for the seller's request, agreement, or other conduct, the purchaser would have performed the condition.[FN7]Case Illustration: In an Oregon case,[FN8] the plaintiffs entered into a contract with the defendants to purchase 293 acres of land. Under the contract, which included a "time is of the essence" clause, closing was to occur on December 15, 1978, at which time defendants were required to deliver to plaintiffs a proper deed with marketable title, free from all encumbrances. The defendants discovered, however, that a cloud on their title existed and they were compelled to file a quiet title action to deliver a proper deed. The parties subsequently signed two agreements, extending the closing date to October 15, 1979, and, while no further extension agreements were thereafter signed by the parties, plaintiffs were ready, willing, and able to perform their obligations under the contract when the quiet title decree was finally entered in defendants' favor. Meanwhile, however, the defendants had changed their minds and argued that because time was of the essence under the contract and the parties had agreed to extend the closing, only until October 15, 1979, the contract lapsed on that date, freeing them from all further obligations. Disagreeing, the Oregon Court of Appeals stated in part: "Defendants' argument must … fail because a party to a contract cannot take advantage of his own failure to perform, and defendants were responsible, at least in part, for the fact that the transaction did not close on schedule."[FN9]

§ 8. Waiver of time of essence clause in contract


Even where the parties to a real estate contract have expressly made time of the essence in the agreement, the rule is well-settled that timely performance may nevertheless be waived.[FN1] The courts have defined "waiver" in the context of contracts for the purchase and sale of real estate as "a voluntary, intentional relinquishment of a known right or advantage" by the purchaser or seller.[FN2] The parties to a real estate contract may waive the right to insist upon

strict compliance with provisions beneficial to them,[FN3] such as a time of the essence provision.[FN4]

While a time of the essence clause can be waived by the party to whom its benefit inures, it should be noted that the parties can contractually modify this rule by the inclusion of an anti-waiver clause.[FN5] Waiver may be established by express waiver, or by actions clearly inconsistent with an intent to retain the contractual protection.[FN6] Although waiver of strict compliance with the written terms of a real estate contract is often said to rest upon intent,[FN7] such intent may be inferred from a party's conduct or words inconsistent with a claim afterwards asserted.[FN8]

The courts have consistently recognized that "even though the time fixed in an agreement for settlement is stated to be of the essence of the agreement, it may be extended by oral agreement or be waived by the conduct of the parties, and where the parties treat the agreement as in force after the expiration of the time specified for settlement it becomes indefinite as to time and neither can terminate it without reasonable notice to the other."[FN9] Likewise, a delay in payment by the purchaser followed by waiver of such default by the seller, even though time for payment was made essential, will constitute a waiver of a "time of essence" clause, and render the contract enforceable by the purchaser.[FN10] Significantly, when performance within a limited time has been waived, before one party can be put in default so as to authorize the other to put an end to the contract, it is incumbent on the latter to demand performance upon the former's part and again restore time as an element in the contract.[FN11]

The defense of waiver has most often been asserted in actions brought against purchasers for failure to comply with the provisions of real estate contracts relating to the time set for closing, conditions of escrow or the deposit of earnest money, and schedule for making installment payments.[FN12] Waiver by the seller may result either from acts of the seller or from statements made by the seller and acted upon by the purchaser.[FN13] Any act or statement by a seller that has the effect of recognizing the contract as an existing agreement despite a default by the purchaser will constitute a waiver of the time set for performance and preclude the seller from filing suit against the purchaser for damages, forfeiture or other relief even though time is stated to be of the essence of the contract.[FN14] If the seller later repudiates or otherwise breaks the contract, he cannot use the purchaser's failure to perform on time as a defense.[FN15] As one court has observed, when such conduct occurs, "the seller should not see if a better sale can be made, and later urge that time is of the essence in the first contract."[FN16] It is also well settled that a buyer's tender of performance is excused where the seller has expressly repudiated the contract or has indicated that he is unwilling or unable to perform.[FN17]Case Illustrations: In a Georgia case,[FN18]the court ruled that the defendant-seller's own delay in securing marketable title to the property constituted a waiver of the purchasers' obligation to tender timely performance on the date set for closing, thus entitling the purchaser to specific performance of the contract. The purchase and sale agreement stated that time was of the essence and provided for closing of the transaction on or before April 30, 1996. The contract also required the seller to cure any title defects within 60 days of notification, and if she failed to do so, the purchasers would have the option of voiding the contract. On April 15, the closing attorney informed the seller that the deed conveying title to her had never been recorded and that there were delinquent taxes and several existing liens on the property. Eventually, the purchasers brought suit for specific performance. The seller contended that specific performance could not be granted because, in spite of the time of the essence clause, the purchasers failed to tender performance within a reasonable time after she acquired marketable title. The court stated the

well-settled rule that, where time is of the essence in a contract, timely performance may be waived orally or by conduct either before or after the closing date and found that the delay in performance was initially caused by a defect in seller's title, and not by the purchasers. The evidence further showed that although the closing attorney assisted the seller in obtaining marketable title and contacted lienholders in an attempt to have certain liens canceled of record, she ceased all communication until the purchaser's suit for specific performance was filed, refusing to respond to any of several phone calls and letters from the purchasers' attorney and real estate broker. The court concluded that the seller waived the requirement of timely tender of performance by avoiding all contact with the purchasers. The court stated that the seller could not cause, by virtue of her own delay, a breach or delay in compliance by the purchaser, and then set up the breach or delay so caused as freeing her from the contract.

In a South Dakota case,[FN19] the court held that the trial court had properly granted specific performance to the purchaser where the sellers had waived the time for payment, had given no notice of any withdrawal of the waiver, and had not given the purchaser a reasonable time to complete the contract. Under the terms of the contract, the purchaser, who had previously rented the land, was to pay the full purchase price on January 1, 1980. In November, the purchaser asked the sellers whether it was all right if there was a delay in obtaining the proceeds of the loan he was arranging, since if it was not, the purchaser did not want to dig the well he was contemplating. The sellers assured him that he should not worry about not being able to purchase the farm, and on January 1 they made no demand and did not attempt to terminate the contract at that time. There was also testimony that in the middle of January the purchaser had explained to them that he was still proceeding with the loan, that the proceeds were expected soon, and that their reply had not indicated that there was any problem with the further delay. However, on February 1, the sellers sent a letter attempting to terminate the contract because of the purchaser's failure to pay the contract price on or before January 1. When the purchaser tendered the price on February 22, the sellers refused to convey title. The court held that the lower court had not erred in finding that the time of payment and the time-of-the-essence clauses in the contract were waived by the sellers. It noted that the purchaser had relied on that waiver in not attempting to procure a loan elsewhere, and it held that where the sellers had given no notice and had not given the purchaser reasonable time to complete the contract, specific performance was proper.


Trial Strategy

Circumstances Establishing Waiver of Strict Compliance with Terms of Real Estate Contract, 60 Am. Jur. Proof of Facts 3d 445

Cases:

Vendor did not waive "time is of the essence" provision of real estate sale contract, although his lawyer reportedly told purchaser that notice date was a "formality," and thus purchaser breached contract by failing to close on closing date; discussions after the breach were intended to salvage the deal only by creating a new agreement rather than resurrecting the old one.

Perroncello v. Donahue, 64 Mass. App. Ct. 564, 835 N.E.2d 256 (2005); West's Key Number Digest, Vendor and Purchaser 78.

In cases involving land sale contracts, once a seller waives a time of the essence clause, a buyer must be afforded a reasonable time within which to perform on the contract; that principle also applies when a buyer is the party who waives the time of the essence clause. Soliz v. Jimenez, 222 Or. App. 251, 193 P.3d 34 (2008); West's Key Number Digest, Vendor and Purchaser 78.

Vendor waived time-of-the-essence provision requiring lease-with-purchase agreement to close by end of 1995; vendor never demanded timely closing or took action to close sale, vendor engaged in negotiations with purchasers about condition of property until at least mid-1996, for nearly seven years vendor accepted purchasers' monthly payments, and vendor never reinstated provision. Patterson v. Amundson, 201 Or. App. 486, 119 P.3d 264 (2005); West's Key Number Digest, Vendor and Purchaser 78.

Vendor orally waived closing date in option contract between vendor and purchaser for the sale of land, though vendor never expressly stated that she would extend closing date, where, on date that option was set to expire, vendor responded "okay" to statement by purchaser's attorney that she would overnight a purchase-and-sales agreement to purchaser who was at that time in another state, vendor in same conversation also informed purchaser's attorney that her own attorney would review the proposed agreement before it was signed, and vendor permitted purchaser's attorney to transmit a copy of the proposed agreement by fax to vendor's attorney for that purpose. Haydon v. Stamas, 900 A.2d 1104 (R.I. 2006); West's Key Number Digest, Vendor and Purchaser 18(3).

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§ 9. Restoration of time of essence clause following prior waiver

Importantly, even though a seller may waive the date of closing specified as being of the essence of the contract, he may thereafter demand the purchaser's performance by another date certain as long as the new date bears a reasonable relation to the time already elapsed, and affords the purchaser a reasonable time in which to tender performance.[FN1] What constitutes a reasonable time to perform following notice turns on the facts and circumstances of each case.[FN2] In addition, the seller must forewarn the purchaser, by clear, distinct and unequivocal notice, that if the purchaser fails to perform by the new closing date, he or she will be considered in default.[FN3]

Likewise, although a pattern of accepting late payments on an installment contract may have the effect of waiving a time of the essence clause, it is subject to the seller's right to reinstate it by proper notice and by providing the purchaser a reasonable opportunity to cure any delinquency.[FN4] Where a seller waives a contract provision making time of the essence by accepting the purchaser's late payments on an installment contract, the seller cannot declare a forfeiture without giving definite and specific notice of intention to claim forfeiture in the future, or without making demand for payment followed by the lapse of a reasonable length of time.

[FN5] What constitutes a reasonable length of time depends on the particular facts of the case.[FN6]Case Illustration: In an Oregon case,[FN7] where the original agreement had made the closing time of the essence, the purchaser knew that its failure to perform on time was creating a financial burden for the seller, and the purchaser twice stated that it would close within a week, the court held that the seller's notice, requiring performance within five days, provided a reasonable time for performance and accordingly that the seller's notice had made time of the essence for the date given. The contract, signed in March, had originally called for a closing date of June 20. Neither party was ready on June 20, and the court noted that there had been a waiver of the original essential time for closing. However, the parties previously had several discussions about closing, during which the seller had stated that it could not wait much longer, and the seller had finally given written notice on July 18, requiring performance by July 23. Accordingly, although the purchaser made a tender on July 25, the court affirmed the trial court's denial of specific performance.

§ 10. Effect of extension of time of performance

Most courts hold that the mere fact that parties agree to an extension of the closing date specified in the contract does not, in the absence of other evidence of waiver or estoppel,[FN1] have the effect of doing away with a time of the essence provision in the contract.[FN2] "Where time of settlement is made the essence of the contract for sale of real estate, it still remains the essence of the contract, although a definite extension of time has been granted."[FN3] Accordingly, where a contract expressly states that time is of the essence and the parties later agree upon an extension of the original time for closing, a number of courts have ruled that it was not necessary for the sellers to make a formal notice putting the purchasers in default when they did not close the purchase within the extended time period.[FN4]

C. Contracts Without Express Provision Making Time of Essence

§ 11. Circumstances where time made of the essence despite absence of express provision in contract


In accordance with the general rule espoused by the courts,[FN1] time is not presumed to be of the essence in performance of a real estate contract unless the parties specifically express such an intent in their agreement,[FN2] or unless the circumstances clearly indicate that it was the intent of the parties.[FN3] A stipulation that time will be considered of the essence of the contract, though customary, is not absolutely essential as long as it is clearly indicated that it was in fact the intention of the parties that time be considered essential.[FN4] In the absence of an express provision in the real estate contract, whether the parties intended to make time of the essence is a question of fact.[FN5]

Time is not necessarily made of the essence of a contract by a provision for conveyance of the property on the punctual or prompt payment of the purchase money, nor by a provision stating that the deal must be consummated within a certain number of days.[FN6] Where a certain time is stated, though it is not stated whether time is of the essence, the clear intent of the

parties manifested by the agreement as a whole in view of surrounding facts determines what was meant, and parol evidence is admissible to show such intent.[FN7] In a number of cases, the courts determined that time was meant to be of the essence, though not so specified, under the particular circumstances presented.[FN8] In one case, for example, where a mortgage loan commitment nowhere expressly declared time to be of the essence, but several provisions therein set forth both the importance and consequences of completing the loan before the prescribed closing date, and it was abundantly and repetitively made clear to the borrower that the transaction would have to be closed by the particular date unless there was an extension of time by the lender, the court concluded that the parties did indeed consider the time of closing to be of the essence since the lender failed either to extend the time for closing or to make clear that it did not consider time for closing of the essence.[FN9]


Cases:

Clear, distinct, unequivocal assertion: Either party to real estate contract may unilaterally make time of the essence by providing notice that is clear, distinct, unequivocal regarding its purpose, gives a reasonable time for the other party to act, and informs the party that failure to perform by the stated date will constitute a default; what constitutes a reasonable time for performance of real estate contract depends upon the facts and circumstances of the particular case. Malley v. Malley, 52 A.D.3d 988, 861 N.Y.S.2d 149 (3d Dep't 2008); West's Key Number Digest, Vendor and Purchaser 78.

While an original real estate sale contract did not include a provision that time was of the essence, a letter from the purchasers to the vendor provided unequivocal notice of a closing date, where time was of the essence, and that the vendor's failure to comply would be considered a default, and thus, the vendor's statements to the purchasers that she did not intend to attend the closing amounted to an anticipatory breach of the contract. Somma v. Richardt, 52 A.D.3d 813, 861 N.Y.S.2d 720 (2d Dep't 2008); West's Key Number Digest, Vendor and Purchaser 159.

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§ 12. Reasonable time allowed to perform where time not made of the essence


When a contract for the sale of real property does not make time of the essence, the law permits a reasonable time in which to tender performance, regardless of whether the contract designates a specific date for performance.[FN1] Unless the parties have clearly made time of the essence of the agreement, most courts hold that the purchaser's failure to perform at closing will not automatically place the purchaser in default since it is generally understood that the purchaser is afforded a reasonable time in which to tender performance after the specified closing date has passed.[FN2] Furthermore, where no date for settlement is agreed upon, the

contract becomes one in which performance, at least with respect to settlement, is to be within a reasonable time.[FN3] However, "it is well settled that even where time is not of the essence, the time for completion is not unlimited and must be reasonable under the circumstances."[FN4] Reasonableness is a question of fact and is determined by consideration of all existing circumstances.[FN5]


Cases:

Implied rule of reasonable time for closing: Under statute allowing a reasonable time for performance to be implied if a contract does not specify a time for performance, the purchase price for real property is deemed payable upon delivery of the deed. West's Ann.Cal.Civ.Code § 1657. Patel v. Liebermensch, 45 Cal. 4th 344, 86 Cal. Rptr. 3d 366, 197 P.3d 177 (2008); West's Key Number Digest, Vendor and Purchaser 75.

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§ 13. Waiver or extension of time set for performance


Timely performance on the part of the purchaser may be excused upon proof that the seller, by words or other conduct, showed an intent to waive the purchaser's obligation to tender timely performance.[FN1] Evidence that the seller granted an extension of the closing date, either verbally or in writing, may be used to establish waiver of performance by the original closing date.[FN2] Waiver also may be established where the seller acquiesces in the purchaser's delay in performance beyond the closing date.[FN3] However, it must be kept in mind that if the seller agrees to a new closing date, affording the purchaser a reasonable time to perform, and makes it clear that time is of the essence with respect to the new closing date, the purchaser can be held in default for failure to tender performance by the new date even though the seller waived the original date set for closing.[FN4]

Where a contract does not state that time is of the essence and the parties continue to negotiate after a specified closing date, with neither party declaring time of the essence or setting a new closing date, the parties by their pattern of dealing have given the contract continued vitality, allowing a reasonable time to tender performance.[FN5] In one case, where the parties to a real estate contract had agreed to an extension of the closing date beyond the date provided in the original agreement, and where no definite meeting of the minds was reached as to the exact time of the new closing, the purchasers were justified in relying upon the understanding that they would have a reasonable time to close.[FN6] Likewise, where the sellers had extended the time for performance, and there had been no meeting of the minds as to a definite new closing date, and thereafter without any notice the sellers had resold the property to another, they could not

claim a forfeiture of the buyer's down payment.[FN7] The buyer was entitled to treat the sellers' actions as an offer to rescind which would permit him to recover his down payment.

On the other hand, waiver of the time for performance of a land sales contract will not be implied merely by the fact that an extension of the time for payment is granted by the seller or his agent where the one granting the extension stipulates that time is of the essence of each extension granted.[FN8] Time may also be made of the essence by the refusal of a party to grant a further extension of time.[FN9] In one case, the fact that an additional extension was allegedly requested on grounds that the seller's title was defective did not preclude a finding of abandonment of the contract by the purchaser for failure to settle on the closing date where it was shown that the alleged defects in title were of minor importance.[FN10]


Trial Strategy


Cases:

Real estate developer, in purporting to waive requirement that owner of 86-acre tract of land first obtain necessary approvals and in indicating its desire to promptly close on contract to purchase tract at minimum $3.5 million price fixed by parties if property owner obtained approval for development of less than 70 lots, did not adequately advise property owner that time was of essence in letter that provided requisite detail of time and place of closing, especially given developer's subsequent equivocation in asking for property owner's input on when he would be willing to close, nor was minimum $3.5 million price offered, pursuant to contract provision that applied only if property owner obtained approval for development and number of lots approved was less than 70, an adequate price, such as would trigger property owner's obligation to close; accordingly, property owner did not breach contract by failing to close at price offered and was not barred, by his alleged breach in failing to close, from relying on contract provision that gave him right to condemnation proceeds if land were condemned prior to closing on sales transaction. In re Catanzareti, 400 B.R. 145 (Bankr. D. N.J. 2009) (applying New Jersey law).

Construction contract's failure to specify a completion date and evidence that project owners contributed to delays in completing construction of house precluded jury charge on time being of the essence, in breach-of-contract action, even though contract did include a provision that time was of the essence. Hopper v. M & B Builders, Inc., 261 Ga. App. 702, 583 S.E.2d 533 (2003); West's Key Number Digest, Contracts 353(6).

Specific grounds for extension: Contract provision which allowed vendor to extend closing for 30 days if he was "unable to give title or to make conveyance, or to deliver possession of the premises" free of tenants and occupants did not allow vendor to extend closing merely because he was unable to finish construction on his new home by closing date; agreement was plain that time was of the essence, seller knew for several months that premises would have to be vacated by closing date, seller had ability to deliver possession by moving himself and his guests into other quarters, and costs of temporary move were de minimis in light of the overall sale price of

the residence. Love v. Pratt, 64 Mass. App. Ct. 454, 833 N.E.2d 674 (2005); West's Key Number Digest, Vendor and Purchaser 75.

Purchasers of real property did not breach contract of sale by delaying closing of sale for two years, even though written contract for sale set closing date of 30 days after acceptance by vendor; contract did not make time of the essence, and thus subsequent oral agreement to delay the closing was enforceable under the statute of frauds, and two-year delay was reasonable under the circumstances. N.J.S.A. 25:1-13, subd. a. In re Estate of Yates, 368 N.J. Super. 226, 845 A.2d 714 (App. Div. 2004); West's Key Number Digest, Equity 78.

Vendor could not suddenly attempt to cancel contract without first notifying purchaser that time was of essence, where one of vendor's principals had allegedly indicated to purchaser following stated closing date intent to waive its right to cancel contract for failure to obtain area variance by that date. Moray v. DBAG, Inc., 305 A.D.2d 472, 760 N.Y.S.2d 193 (2d Dep't 2003); West's Key Number Digest, Vendor and Purchaser 78.

Parol evidence of waiver: A waiver of stipulated time limit in a contract may be shown by parol evidence and from the circumstances or course of dealing. Driver Pipeline Co., Inc. v. Mustang Pipeline Co., Inc., 69 S.W.3d 779 (Tex. App. Texarkana 2002), petition for review filed, (Apr. 4, 2002); West's Key Number Digest, Contracts 305(1).

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§ 14. Subsequent notice making time of the essence


Even where time for performance of a real estate contract is not expressly made of the essence, under certain circumstances one party may by notice make it so.[FN1] Where time is not originally of the essence, it may be made so by one party giving notice to the other, insisting on performance by a certain date, provided the notice is sufficient and reasonable.[FN2] In order to convert the contract into one in which time is of the essence, the time allowed by the notice must be reasonable,[FN3] and the notice must provide a clear and unequivocal warning that failure to perform by the specified date would be considered a default.[FN4] The notice need not state specifically that "time is of the essence," as long as the notice specifies a time on which to close and warns that failure to close on that date will result in default.[FN5] Even under circumstances where the original closing date has been waived, performance may be demanded by proper notice of another date certain as long as the new date bears a reasonable relation to the time already elapsed, and provides a reasonable time in which to tender performance.[FN6]

When a contract for sale of real property does not specify that time is of the essence, or time is not otherwise made of the essence from the surrounding circumstances, the parties are afforded a reasonable time to tender performance[FN7] either party is entitled to a reasonable adjournment of the closing date.[FN8] However, even though time was not made of the essence of the contract as originally prepared, a valid extension of time may be agreed to, and the new time fixed for performance be made of the essence.[FN9] As previously stated, the effectiveness of the condition making time of the essence is contingent on the specificity of the notice and on

the reasonableness of the time period stated in the notice.[FN10] In granting an extension of the time for performance, one party may unilaterally impose the condition that time is of the essence as to the rescheduled date,[FN11] and both parties will be bound by the condition of time.[FN12] Thus, where the seller agrees to a new closing date, affording the purchaser a reasonable time to perform, and makes it clear that time is of the essence with respect to the new closing date, the purchaser can be held in default for failure to tender performance by the new date.[FN13] Likewise, if the seller sends notice to the purchaser setting a new closing date and stating that time is of the essence, it is incumbent on the seller to tender performance of his obligations on the closing date; otherwise, the purchaser has the right to declare the seller in default and sue for breach of contract.[FN14]Case Illustrations: In an Alabama case, the court held that the defendant-sellers' agreement to a second 6-month extension of the closing date, combined with their refusal of further requested modifications of the contract, one as to time, made time of the essence, and justified the sellers' rejection of the closing documents when they were tendered one day after the close of the final extension period.[FN15]The contract originally had a 6-month closing date, and the two extensions brought the final closing date to 1 1/2 years after the contract was signed. The court explained that the parties could make time essential in a real estate contract either by a clear manifestation of their intent in the contract or by subsequent notice. However, here the court required no express notice from the seller beyond that given by the second extension agreement, stating that it was clear that the purchaser knew or should have known, by the sellers' actions, that they were demanding strict adherence or compliance with the terms of the extension. The court held that the granting of the extension itself made time of the essence and that, under the terms of the contract, the sellers had the right to cancel, at their election, on the failure of the purchaser to carry out its terms. The court affirmed the trial court's judgment against the purchaser in his action for specific performance.

On the other hand, in a New York case, the court held that the plaintiff-purchasers' letter to the defendant-seller did not constitute a clear and unequivocal notice making time of the essence because it did not set a final closing date, nor give the seller a reasonable time to perform.[FN16] The plaintiff-purchasers entered into a contract to purchase certain real property from the defendant-seller and made a down payment of $13,000, which was placed in escrow with seller's attorney. The contract provided for a closing date of "on or about December 15, 1991," which date was eventually adjourned by mutual consent of the parties, and a new closing date of January 21, 1992 was set. The January 21, 1992 closing was, in turn, postponed due to the fact that a tenant on the seller's property had not yet vacated the premises. In a letter to the purchasers, dated January 21, 1992, the seller's attorney advised them that he anticipated closing in early February but that he would be out of the state the last week of January and would call on his return. The purchasers' attorney, in a reply letter dated January 24, 1992, stated that if the house was not vacant by January 31, 1992, they would deem the contract canceled. When the seller's attorney returned to his office the first week in February, he sought to reschedule the closing, but the purchasers refused because the tenant had not vacated the premises by January 31, 1992. The tenant finally vacated the premises on February 15, 1992. Reversing the trial court's determination, the appellate court found that the purchasers' letter of January 24, 1992 failed to make "time of the essence." The court found that the purchasers' attorney had written in that same letter that if the premises were vacant by January 31, 1992, then the seller's attorney could "call my office so we can set another closing date." The court concluded that this expression of the purchasers' willingness to schedule a new closing date after January 31, 1992

could only have meant that they did not view time as of the essence. Moreover, noted the court, the letter never stated that closing had to take place on January 31 and, in fact, set no closing date at all. Thus, the court ruled that the purchasers' letter did not constitute a "clear, distinct and unequivocal" notice that time was of the essence. Furthermore, the court concluded that the purported January 31 "deadline" was unreasonable in light of the fact that the purchasers had already been advised that the seller's attorney was going to be out-of-state on that day. Since the purchasers' notice failed to make time of the essence, the court ruled that the seller was entitled to a reasonable adjournment until the tenant vacated the property. Thus, when the purchasers refused to set a closing date and sought a return of their down payment, they wrongfully repudiated the contract. Consequently, the court ruled that the seller was entitled to retain the purchasers' down payment as damages.


Cases:

Purchaser under contract for sale of real property made prima facie showing that he made sufficient demand for performance entitling him to specific performance of contract where, pursuant to contract of sale containing no provision indicating that time was of the essence, purchaser scheduled closing date and advised vendor that time was of the essence, purchaser scheduled second closing date and again advised vendor that time was of the essence after first closing date passed without any activity, and purchaser appeared at scheduled place and time with bank check for purchase price, pursuant to contract, but vendor did not appear. Jacobowitz v. Leak, 19 A.D.3d 453, 798 N.Y.S.2d 67 (2d Dep't 2005); West's Key Number Digest, Specific Performance 91.

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§ 15. Subsequent notice making time of the essence—Reasonableness of time set for performance in default, destroying purchaser's right to specific performance


Case Illustrations: In a District of Columbia case, after apparently finding a waiver of the original time for closing of the land sales contract, the court held that the time for closing could be made of the essence by the seller serving notice on the purchaser and fixing a reasonable time by which the contract must be closed.[FN1]The court explained that reasonableness, out of necessity, must depend on the circumstances of each case, and that the time given must bear some reasonable relationship to the time which has already elapsed. If the time provided in the notice is not reasonable under the circumstances, then, added the court, it may be construed as arbitrary and entirely disregarded. Since the original contract had given a period of less than 30 days for performance and a 4-month extension had been granted before the seller's notice

requiring performance within 15 days, and the sole contingency which the purchasers had to meet was that of obtaining financing, the court held that it could not say that the final 15-day notice was unreasonable under all the circumstances.

In a New York case, the court held that the defendant-seller's letter to the plaintiff-purchaser converted the real estate contract into one making time of the essence and that the final closing date, which afforded the purchaser 21 days from the date of the letter to close, was reasonable under the circumstances.[FN2] The contract provided that the closing date was to be May 20, 1985. The purchaser did not make arrangements to close by that date, nor did he request an adjournment of the closing. By letter dated May 22, 1985, the seller's attorney informed the purchaser's attorney that the seller was granting "a final adjournment of closing until June 6, 1985" and that in the event the purchaser failed to close title on that day, the seller would "have no alternative but to hold you in default." Prior to June 6, 1985, the closing date was adjourned to June 12, 1985. In another letter to the purchaser's attorney, dated June 5, 1985, the seller's attorney confirmed that June 12, 1985 was the adjourned date of closing and warned that the "seller will not permit any additional adjournments to the purchaser as I previously advised you." On June 12, 1985, neither the purchaser nor his attorney appeared at the office of the seller's attorney to close title. The seller notified the purchaser that he was in default under the contract, that he was canceling the contract, and that he would retain the plaintiff's down payment of $8,000 as liquidated damages. Reversing the trial court, the appellate court pointed out that a party need not state specifically that time is of the essence, as long as the notice specifies a time on which to close and warns that failure to close on that date will result in default. The court found that the seller's letter of May 22, 1985 stated clearly that the seller was granting "a final adjournment of closing until June 6, 1985" and that it also warned that if the purchaser failed to close title on that day, that the purchaser would be considered in default. Then after granting another adjournment to June 12, 1985, the seller further warned that he would not permit any additional adjournments and would hold the purchaser in default if he failed to close that day. Based on this evidence, the court concluded that the seller clearly converted the contract into one in which time was of the essence and established June 12, 1985 as the time for closing. Thus, the seller was not obliged to grant a further adjournment, and having properly held the purchaser in default under the contract, he was entitled to retain the purchaser's down payment as liquidated damages.

In a South Carolina case, the court impliedly approved a one-day notice by the sellers as affording the purchaser a reasonable time to perform under the circumstances.[FN3] The contract, made on August 2, 1965, called for closing on or before September 1, 1965. Toward the end of August, one of the sellers inquired whether she should come to South Carolina from New York for the September 1 closing, and was told that although the purchasers still wanted to have a surveyor look at the land, there was no reason why the transaction could not be closed on September 1. Beginning September 1, the sellers made several unsuccessful attempts to contact the purchasers, and were unable to speak to them until September 5. On the morning of September 6, the sellers told one of the purchasers that one of the sellers could not stay any longer, due to the fact that she had only a one-week leave of absence from her work, and that the deal must be closed by the 7th. When it was not, the sellers declared the contract at an end. The court noted that time is generally not of the essence of the contract to convey land, but that where the time for performance had arrived and passed, it might be made of the essence by one party's giving notice to the other that he would insist on performance by a certain date, provided the time allowed by the notice was reasonable. Noting that the reasonableness of the time allowed

was a question of fact depending on the particular circumstances, the court concluded that the testimony in the case sustained the master's findings below, in favor of the sellers and denying specific performance to the purchasers.


Cases:

One-year typographical error: Clear, substantial, and convincing evidence existed to support trial court's reformation of contract to purchase real property due to typographical error that made closing date one year later than that intended by vendor, although potential purchaser testified that there never was conversation between purchaser and real estate agent in which agent informed purchaser of speedy closing within two weeks of signing contract; evidence indicated that agent informed potential purchaser that reason for lower price than that earlier discussed between parties was that there would be closing within two weeks, and agent, when delivering copy of signed agreement to purchaser, told purchaser, "We're all set for next week." Traggis v. Shawmut Bank Connecticut, N.A., 72 Conn. App. 251, 805 A.2d 105 (2002); West's Key Number Digest, Reformation of Instruments 45(3).

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D. Options to Purchase

§ 16. Time as of the essence in exercise of option to purchase realty


Mention must be made of the fact that the rules regarding the determination of whether the parties to a real estate contract intended time to be of the essence are different in the case of options to purchase real estate.[FN1] In fact, as a general rule, time is ordinarily considered to be of the essence with regard to the time specified for exercise of an option to purchase. One of the most important requirements for effective exercise of an option to purchase real property is that the optionee accept the offer during its life.[FN2] As one court has remarked, "because of the singular one-sidedness of an option contract in creating, for a stated duration, an irrevocable offer of the optionor, the law requires that the optionee perform all of its obligations under that contract with particular timeliness."[FN3]

Nevertheless, in determining whether an optionee has acted to accept his option in a timely manner, the courts are faced with varying principles and issues, depending on whether the option contains an express time limit within which it must be exercised. Where the option includes a definite time of expiration, most courts have determined the timeliness of the optionee's exercise of the option according to the rule that the optionee's notice must be received by the optionor prior to the expiration date in order to be effective.[FN4] If an optionee elects to buy property pursuant to an option contract, he is required to give notice of acceptance or exercise of the

option within the time that the option remains open, since both at law and in equity such time is regarded as of the essence of the option contract, whether expressly so stated or not, and the rights of an optionee who fails to accept in a timely manner expire without notice or declaration of forfeiture.[FN5] As one court has observed, "[t]he period of time within which an option is to be exercised is an inherent ingredient; and, unlike a contract which calls for no stated time for performance, the period of time in the case of an option is of the essence of the agreement."[FN6]

On the other hand, the general rule that time is of the essence in the exercise of an option is inapplicable where there is no set time in the agreement for the exercise of the option,[FN7] with the courts holding that the optionee has a reasonable time to exercise the option if no time period is specified.[FN8] Where an option is open-ended and does not specify a definite time of expiration, the courts have observed the rule that notice of exercise of an option without a stated duration must be given within a reasonable time, and have focused their attention on what constitutes a reasonable time under the circumstances.[FN9]

Once an option to purchase land is exercised, it changes its status from a unilateral, irrevocable offer into an enforceable bilateral contract for the sale of land.[FN10] As a result, the rules governing payment of the purchase price for land subsequent to exercise of an option are the same as the rules governing payment of the purchase price of land under other bilateral contracts for the purchase of land. Ordinarily, time is not of the essence and completion of the sale prior to the termination of the option date is not required.[FN11] Where the option agreement does not contain any dates certain for the execution of the contract or for the closing of title, and does not expressly provide that time is of the essence, the parties are given a reasonable time to tender performance.[FN12]


Trial Strategy

Optionee's Timely Exercise of Option to Purchase Realty, 60 Am. Jur. Proof of Facts 3d 255

Cases:

Performance of contract for sale of 162-acre tract of farmland after date specified for closing in contract, pursuant to statute requiring vendor to give notice of cancellation of contract upon default and allowing for termination of contract in 30 days unless purchaser complied with conditions of default, did not constitute full performance of contract, for purposes of condition precedent in option agreement requiring purchaser to fully perform purchase agreement to be entitled to exercise option to purchase additional 914-acre tract. M.S.A. § 559.21. Edina Development Corp. v. Hurrle, 670 N.W.2d 592 (Minn. Ct. App. 2003); West's Key Number Digest, Vendor and Purchaser 18(3).

Purchaser's failure to close sale of property and tender purchase price within 90 days of exercising option to purchase real estate did not render option void or discharge obligation of personal representative of vendor's estate to sell the property, where purchase option agreement did not make time of the essence in payment and closing sale of property. In re Estate of Heyl, 42 S.W.3d 19 (Mo. Ct. App. E.D. 2001); West's Key Number Digest, Vendor and Purchaser 57.

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§ 17. Time as of the essence in exercise of option to purchase realty—Circumstances excusing optionee's failure to give timely notice of exercise of option

The requirement that an option to purchase realty be exercised in a timely manner, which is likewise applicable to options to repurchase,[FN1] is generally avoidable only where there are circumstances deemed to excuse timely acceptance by the optionee, as where the optionor takes actions calculated to cause delay,[FN2] fails to furnish the optionee with necessary information[FN3] or the required title,[FN4] or waives acceptance of the option within the stated time frame.[FN5] The defense of waiver may be established by express statements or by acts and conduct from which an intention to waive may reasonably be inferred.[FN6] Ordinarily, mere silence is insufficient to establish a waiver unless there is an obligation to speak.[FN7]

Ordinarily, the fact that the optionor gave notice that it would not comply with the terms of the contract before the time for exercising the option expired, does not excuse the optionee from giving proper notice of his election to exercise the option. Courts have rejected the argument that an optionor's repudiation of the agreement excuses an optionee's untimely notice of exercise, reasoning that until the option is accepted in accordance with the terms of the original contract, no contract to purchase exists, and the optionor is under no obligation to convey the property.[FN8] Thus, if the optionee does not give proper notice of his intent to exercise the option to purchase, it is immaterial whether the optionor had previously repudiated the option to purchase agreement.[FN9]

II. Elements of Proof

§ 18. Proof of intent to make time of the essence in performance of real estate contract; checklist

Proof of the following facts and circumstances may be used to establish that time was, or was not, made of the essence in the performance of a real estate contract:

General Information

□ Parties: □ Posture of case in which time of essence alleged[FN1] — Time of essence asserted by seller as defense to purchaser's action for breach of contract — Time of essence asserted by seller as defense to purchaser's action for specific performance — Time of essence asserted by seller as basis for declaring purchaser in breach of contract — Time of essence asserted by seller as basis for forfeiture or strict foreclosure — Time of essence asserted by purchaser as basis for declaring seller in default and justifying

rescission and/or return of down payment — Time of essence asserted by purchaser in defense of seller's action for breach of contract

□ Circumstances of real estate transaction □ Copy of real estate contract — Purchaser's obligation's under contract — Seller's obligations under contract

□ Terms of agreement relating to time of performance — Contract with express provision making time of essence — Contract without express provision making time of essence

□ Dealings of parties related to time of performance

Contracts with Express Provision Making Time of Essence

□ Circumstances where time made of the essence by express provision in contract[FN2] □ Intent of parties as controlling factor as to whether time made of the essence[FN3] — Admissibility of parol evidence

□ Application of time of essence provision where neither party tenders performance by stated time[FN4] □ Application of time of essence provision where defaulting party's nonperformance caused by conduct of other party[FN5] □ Effect of waiver of time of essence clause in contract[FN6] □ Restoration of time of essence clause following prior waiver[FN7] □ Effect of extension of time of performance[FN8]

Contracts without Express Provision Making Time of Essence

□ Circumstances where time made of the essence despite absence of express provision in contract[FN9] □ Intent of parties as controlling factor as to whether time made of the essence[FN10] — Admissibility of parol evidence

□ Reasonable time allowed to perform where time not made of the essence[FN11] □ Waiver or extension of time set for performance[FN12] □ Sufficiency of subsequent notice making time of the essence[FN13] — Notice allows reasonable time for performance — Notice clearly warns that failure to perform by specified date will result in default

Options to Purchase Real Estate

□ Time as of the essence in exercise of option to purchase realty[FN14] □ Circumstances excusing optionee's failure to give timely notice of exercise of option[FN15]

III. Model Pleadings

§ 19. Sample Complaint of real-estate seller in action based on purchaser's failure to tender performance by closing date—Alleging subsequent notice making time of the essence

The Complaint that follows illustrates the allegations necessary for a plaintiff-seller of real estate to set forth the elements of an action for rescission and damages against the defendant-purchaser for failure to tender performance by the closing date specified in a notice that allegedly made time of the essence. The corresponding Answer and Counterclaim of the defendant-purchaser is provided in § 20.

[Title of court and case name omitted.]

COMPLAINT

Plaintiff, [name of seller], residing at [street address], in the Village of , County of and State of , by way of complaint against the defendant, [name of purchaser] says: 1. Plaintiff is the owner of certain property known as [street address], [city], [state] and further described as Block , Lot __, of the current assessment map of the Village of , County of , State of ("the Property").

2. On or about July 7, 2000, plaintiff and defendant entered into a contract for the purchase and sale of the above-described property ("the Contract"). A copy of the Contract is attached hereto as Exhibit A.

3. The Contract provided for a closing date of August 17, 2000.

4. On August 15, 2000, two days before the scheduled closing date required by the Contract, the defendant requested an extension to August 25, 2000. The plaintiff granted this extension; however, by letter dated August 16, 2000, sent by plaintiff to defendant by certified mail, return receipt requested, plaintiff notified defendant that no further extensions would be granted, and that time was of the essence. The letter further stated that if defendant failed to tender performance by the August 25, 2000 closing date, plaintiff would consider the Contract null and void. A copy of said letter is attached hereto as Exhibit B.

5. Defendant failed to tender performance by the August 25, 2000 closing date. As a result of said failure of performance, the defendant has breached the Contract between the parties.

6. By failing to tender performance by the August 25, 2000 closing date, defendant's conduct shows a clear intent to abandon the Contract.

7. As the result of the aforesaid breach and abandonment of the Contract by defendant, plaintiff has incurred substantial costs, expenses and damages.

WHEREFORE, Plaintiff demands judgment against Defendant: (a) for rescission of the Contract;

(b) for damages, together with interest, costs, and attorneys fees; and

(c) such other relief as this Court may deem just and proper.

[Name of Law Firm]

BY:

[Signature]

[Name of Attorney]

DATE:

§ 20. Sample Answer and Counterclaim of purchaser with affirmative defenses, including seller's waiver of time set for closing, and seeking specific performance of real estate contract

The Answer and Counterclaim provided here responds to the allegations in the seller's Complaint provided in the preceding section. The Answer sets forth affirmative defenses to the seller's action for rescission and damages, including the defense of waiver, and the Counterclaim provides illustrative allegations in support of the purchaser's claim for specific performance of the contract.

[Title of court and case name omitted.]

ANSWER AND COUNTERCLAIM

The defendant, [name of defendant-purchaser], residing at [address], County of , State of , by way of answer to the plaintiff's Complaint, says: 1. The defendant admits the allegations of paragraph 1.

2. The defendant admits the allegations of paragraph 2.

3. The defendant admits the allegations of paragraph 3.

4. The defendant denies the allegations of paragraph 4, except that defendant admits receiving the letter referenced in this paragraph.

5. The defendant denies the allegations of paragraph 5.



FIRST SEPARATE DEFENSE

The Complaint fails to set forth a cause of action upon which relief can be granted.

SECOND SEPARATE DEFENSE

The plaintiff is estopped by her conduct from all relief sought in the Complaint.

THIRD SEPARATE DEFENSE

The plaintiff waived strict compliance with the terms of the contract, including, but not limited to, the time set for performance, barring all relief sought in the Complaint.

FOURTH SEPARATE DEFENSE

The plaintiff has failed to comply with the terms of the agreement between the parties, and therefore the Complaint should be dismissed.

FIFTH SEPARATE DEFENSE

The defendant has complied with the terms of the agreement between the parties, and therefore the Complaint should be dismissed.WHEREFORE, Defendant demands judgment dismissing the Plaintiff's complaint, together with attorney's fees and costs of suit.

COUNTERCLAIM

Defendant-counterclaimant, [name of defendant-purchaser], by way of Counterclaim against the plaintiff says: 1. Plaintiff is the owner of certain property known as [street address, city, state] and further described as Block , Lot __, of the current assessment map of the Village of , County of , State of (hereinafter referred to as the "Property").

2. On or about July 7, 2000, plaintiff and defendant entered into a contract for the purchase and sale of the Property (hereinafter referred to as the "Agreement"). A copy of the Agreement is attached hereto as Exhibit A.

3. The Agreement provided for a closing date of August 17, 2000 but the parties did not make time of the essence under the terms of the Agreement.

4. On August 14, 2000, and within a reasonable time following the closing date set forth in the Agreement, defendant tendered performance to plaintiff in accordance with the terms of the Agreement.

5. At the time of the aforesaid tender of performance, the plaintiff refused, and has ever since continued to refuse acceptance of defendant's tender of performance.

6. At the time of the aforesaid tender of performance, defendant was, and has ever since continued to be, ready, willing, and able to perform her obligations under the Agreement.

7. Following the plaintiff's rejection of the aforesaid tender of performance by defendant, defendant formally demanded of plaintiff that she perform in accordance with the terms of the Agreement and convey title to the Property in exchange for payment of the full purchase price. The plaintiff refused, and has ever since continued to refuse, performance of her obligations under the Agreement.

8. As a result of the aforesaid refusal of the plaintiff to perform her obligations under the Agreement, plaintiff has breached the Agreement between the parties.

9. The defendant has complied with all terms of the Agreement between the parties.

WHEREFORE, defendant-counterclaimant, [name of purchaser] demands a judgment of this Court ordering plaintiff, [name of seller] to specifically perform the obligations imposed upon her by the terms of the aforesaid Agreement attached hereto as Exhibit A.

[Name of Law Firm]

BY:

[Signature]

[Name of Attorney]

DATE:

IV. Proof of Intent of Parties to Make Time of the Essence in Mortgage Loan Commitment

[The following Q & A presents testimony from a case in which the plaintiff-borrower is seeking to establish that the parties intended to make time of the essence in the performance of a mortgage loan commitment, and that as a result of the defendant-lender's failure to perform by the date specified for closing, the borrower is entitled to hold the lender in default, rescind the agreement, and recover his security deposit. The following proof assumes that the borrower and lender negotiated a mortgage loan commitment agreement for the refinancing of certain property, that the contract required the borrower to give the lender a substantial security deposit, and that the contract does not contain an express provision making time of essence.]

A. Testimony of Plaintiff-Borrower

§ 21. Borrower's purpose in making contract

Q. Are you the owner of certain property located at ?A. Yes, I am.Q. On or about , , did you apply to [defendant-lender] to borrow a substantial amount of

money, to be secured by a mortgage on that property?A. Yes, I did.Q. Was there any special reason why you applied for a loan at that particular time?A. Yes, there was.Q. What was that reason?A. When I bought that property, I borrowed money from [second lender] to finance the

transaction. That was a short-term loan that was due to be repaid by April 20, and so I needed to refinance the property before then.

§ 22. Lender's knowledge of borrower's purpose

Q. Was that initial loan secured by a mortgage on the property?A. Yes, it was.Q. Do you know if that mortgage was recorded?A. Yes, it was.[Counsel should be prepared to prove that the document was in fact recorded, by introducing

into evidence a properly certified and authenticated copy of the recorded mortgage.]Q. In applying to [defendant-lender] for a loan, did you state that the property was subject to

a mortgage?A. Yes, I did.

Q. Did you make that statement in writing?A. Yes, I did.Q. Could you describe what form that statement took?A. The application form asked whether there were any outstanding mortgages or liens on the

property, and I listed that mortgage.Q. Did you state on the form when the mortgage loan was due to be paid?A. Yes, I did.[If desired, the loan application form may be authenticated and offered into evidence at this

time, for the limited purpose of showing the lendor's knowledge of the borrower's circumstances at the time the parties entered into the agreement. It may be necessary or advisable to delete from the application form any material that is extraneous to the litigation or that contradicts or varies the express terms of the final written agreement between the parties.]

Q. Did you also discuss the existing mortgage with any representative of [lender]?A. Yes, I did.Q. With whom did you discuss it?A. With [lender's officer].Q. Do you know his title or capacity with [lender]?A. He is a vice-president, I believe.Q. Could you relate briefly the substance of your discussion with him regarding that

mortgage?A. One of the first things he asked me was why I wanted a loan from his firm, and I told him

that the initial loan had been only for a short term, so I could acquire the property and have time to arrange for permanent financing.

Q. Did you tell him when the initial loan was due to be paid off?A. Yes, I did.

§ 23. Terms of agreement relating to time of performance

[Counsel requests Court Reporter to mark exhibit.]Q. Did you ultimately enter into a mortgage loan commitment with [lender]?A. Yes, I did.Q. I am now handing you a document that has been marked for identification as plaintiff's

Exhibit __ and ask if you can identify it.A. It is my copy of the mortgage loan commitment.Q. Is this your signature at the bottom of the document?A. Yes, it is.Q. Can you identify the other signature appearing on the document?A. It's signed by [lender's officer].[It is assumed that the lender does not contest the authenticity of the document.]Counsel: I offer this mortgage loan commitment, marked for identification as plaintiff's

Exhibit __, into evidence as plaintiff's Exhibit __.The Court: It may be admitted.Q. Directing your attention to the section of the agreement labeled paragraph 10, will you

please read that paragraph aloud to the court?A. [Witness reads paragraph providing that loan shall be acquired on April 19, and

providing that in event of borrower's failure to acquire loan on that date lender shall be entitled to recover a stipulated sum as liquidated damages from buyer.]

Q. Now directing your attention to paragraph 15, would you please read that paragraph aloud to the court?

A. [Witness reads paragraph providing that any extension of time set for closing the loan may only be granted by written approval of lender, and that lender would have the sole discretion to determine whether to grant such an extension.]

[It is assumed that the foregoing provisions are the only terms of the contract referring to the time for performance, and that there is no clause expressly making time of the essence of the agreement.]

§ 24. Significance of timely performance

Q. Is there any special significance to the date set in the agreement, April 19?A. Yes, there is.Q. What is its significance?A. It was the day before the short-term loan came due, and I had to have the long-term

financing arranged by then.Q. Referring now to paragraph 15, which you just read to the court, did you have any

discussion with [lender's officer] regarding the amount of money established as liquidated damages in case you did not acquire the loan on time?

A. Yes, I did.Q. Could you describe the substance of that conversation, please?A. I questioned the amount because it seemed quite high to me, far more than necessary to

cover any actual damages they might have.Q. Did [lender's officer] respond to your question?A. Yes, he did.Q. What did he say?[If opposing counsel objects on hearsay grounds, it may be argued that the officer's

statement is admissible as an admission by the opposing party; it may also be argued that since the statement is offered only to prove that the lender intended that performance be timely, and not to prove the truth of the matter contained in the statement, it is not hearsay for such purpose.]

A. He stated that they had to have the money available for me on that date, and if for some reason I failed to go through with the loan those funds would sit idle until they could find a new borrower, and they could lose a substantial amount of money because of the delay.

§ 25. Lender's failure to grant borrower's request for extension of time

Q. After you signed the loan agreement with [lender], did you have any further discussions with them regarding that April 19 date?

A. Yes, I did.Q. When was the first such discussion?A. It was early in April, April 4 or 5.Q. Could you relate briefly the circumstances of that discussion?A. Under the contract, I was supposed to provide them with a survey of the property. I sent

them one around the middle of March, and [lender's officer] called me a couple of weeks later to say that the survey was illegible and I would have to send them a new one. I was concerned about whether I could get the surveyor to do that in time for the closing and I told that to

[lender's officer] and asked whether they would agree to extend the closing date if that became necessary.

Q. Did [lender's officer] respond to your question about an extension of the closing date?A. Yes, he did.Q. What was his response?A. He first said that we could talk about postponement later. Then, after I asked him to be

more specific, he said that [lender] had a general policy against granting extensions, and if it did become necessary there would have to be a written agreement with a new date.

Q. Did you also check with [prior lender] to see if you could extend the due date on the purchase money loan?

A. Yes, I did.Q. What was their response?A. They said that since I had a firm commitment for permanent financing they would be

willing to extend their loan for a few days if necessary, but there would be a penalty charge of dollars per day after April 20.

Q. Were there any further discussions or dealings with [defendant-lender] regarding the closing date?

A. Yes, there were.Q. When did the matter next come up?A. I sent them a follow-up letter after the telephone call I just described.[Counsel requests Court Reporter to mark exhibit.]Q. I am now showing you a document that has been marked for identification as plaintiff's

Exhibit __ and ask if you can identify it.A. It is the follow-up letter I sent [lender].Q. Is this your signature?A. Yes, it is.[It is assumed that the original of the letter has been obtained from the lender by pretrial

discovery, and that there is no objection to its admission.]Counsel: I offer this letter, marked for identification as plaintiff's Exhibit __, into evidence as

plaintiff's Exhibit __.The Court: It may be admitted.Q. Would you please read the body of the letter aloud to the court?A. [Witness does as requested. Letter states that borrower will make every effort to provide

an accurate survey sufficiently in advance of the closing date, but requests lender to extend the time period for closing for an additional week, until April 26.]

Q. Did you receive any response to that letter, either in writing or orally, from [lender] prior to April 19?

A. No, I did not.Q. Did you have any reason to believe, on or before April 19, that [lender] had granted your

request for an extension?A. No, I did not.

§ 26. Borrower's request to fix time and place for performance

Q. Did you have any further dealings with [lender] regarding the closing date?A. Yes, I did.Q. When was the next such dealing?

A. It was on April 14.Q. What took place at that time?A. I mailed them a letter with various documents they wanted and asked them to fix a time

and place for closing.[Counsel requests Court Reporter to mark exhibit.]Q. I am now handing you a document that has been marked for identification as plaintiff's

Exhibit __ and ask whether you can identify it.A. It is my letter of April 14.Q. Is this your signature?A. Yes, it is.[It is assumed that the original copy of the letter has been obtained from the lender by

pretrial discovery, and that there is no objection to its admission.]Counsel: I offer this letter, marked for identification as plaintiff's Exhibit __, into evidence as

plaintiff's Exhibit __.The Court: It may be admitted.Q. Would you please read the text of the letter into the record?A. [Witness does as requested. Letter states all preliminary details have been taken care of

and that it will be possible for borrower to close the transaction by the date originally specified. It also requests lender to set a time and place for the closing.]

Q. Did you receive any reply or response to this letter, on or before April 19?A. No, I did not.Q. Did you pursue the matter of the closing date any further yourself?A. Yes, I did.Q. What did you do?A. Three days later, April 17, I tried to call [lender's officer].Q. Did you reach him?A. No, I did not.Q. Did you speak to anyone at [lender]?A. Yes, I did.Q. To whom did you speak?A. To a person who identified herself as [secretary of lender's officer].Q. What did that person say?A. She said that [lender's officer] was out of town and would be back on April 20.Q. Did you respond to that statement?A. Yes, I did.Q. What was your response?A. I said that I had a loan commitment with [lender] that was supposed to close by April 19,

that I was ready to close on that date, and that I was anxious to set up the closing.Q. Did the person with whom you were speaking make any response?A. She said she would have someone look into the matter and call me back.Q. Did anyone from [lender] call you back on or before the 19th?A. No.Q. At any time prior to April 19, , were you informed, either in writing or verbally, by

anyone representing [lender] that the closing date of April 19, , specified in the commitment, would be extended beyond that date?

A. No.

§ 27. Borrower's prompt repudiation of contract following default

Q. When was your next communication with [lender] regarding this transaction?A. On April 20.Q. What occurred on that date?A. Two things. First, I sent them a letter saying that since they had failed to complete the

transaction within the time limit we had established, or to extend the time limit, I had turned elsewhere for financing. Second, I received a telephone call from [lender's officer].

[Counsel requests Court Reporter to mark exhibit.]Q. I am now handing you a document that has been marked for identification as plaintiff's

Exhibit __ and ask if you can identify it.A. It is my letter of April 20.Q. Is this your signature?A. Yes, it is.[It is assumed that the original copy has been obtained from the lender by pre-trial

discovery, and that there is no objection to its admission.]Counsel: I offer this letter, marked for identification as plaintiff's Exhibit __, into evidence as

plaintiff's Exhibit __.The Court: It may be admitted.Q. Would you please read the text of the letter into the record?A. [Witness does as requested. The letter states that since lender failed to perform within the

time specified, borrower considers the transaction canceled and requests return of the security deposit and loan fees previously paid to lender.]

Q. What was the substance of your telephone conversation with [officer] on that same day?A. He apologized that he had not had an opportunity to respond to my letter of the 14th, and

wanted to set up a time for the closing. I replied that since they had missed the deadline the transaction was cancelled, and that a letter outlining my position was in the mail to him.

V. Proof of Insufficiency of Seller's Notice Making Time of Essence

[The following sample testimony is from a case in which the plaintiff-purchasers have brought an action for specific performance of real estate contract that does not contain an express provision making time of the essence and seeking to enjoin the defendant-seller from terminating contract, from implementing forfeiture of the purchasers' down payment, and from contracting to sell to any other party. Presented is testimony of the seller, as adverse witness, and testimony of the purchaser to establish that a notice from the seller was insufficient to make time of the essence because it did not afford the purchaser a reasonable amount of time to tender performance.]

A. Testimony of Defendant-Seller (Adverse Witness)

Opposing party as adverse witness. Proof through the opposing party may be accomplished by examination before trial with the use of depositions and interrogatories, by cross-examination during the opposing party's direct case, or by calling the opposing party as an adverse witness. In the latter instance, the federal courts[FN1] and most state courts, permit the opposing party to be called as an adverse witness and examined as if under cross-examination.[FN2] Leading questions may therefore be asked.[FN3] Although the opponent should not routinely be called as

an adverse witness, the opponent's testimony may at times be necessary to establish some element of a prima facie case.[FN4]§ 28. Description of property

Q. Mr. [defendant-seller], where is your property located that is the subject of the present litigation?

A. I own a two-story, colonial-style home on two acres of land on Street in the Town of .Q. And you decided to sell your property to the [plaintiff-purchasers]?A. Yes.Q. You asked them whether they would have an interest in buying your property?A. Yes, I did.Q. You were acquainted with the [purchasers] before offering to sell your property to them?A. Yes. I had known them for several years.Q. They were your next door neighbors, right?A. Yes.Q. How long did you know them before offering to sell your property to them?A. About nine years.Q. Would you say that you became friends with them over the years?A. I suppose so.

§ 29. Execution of contract; absence of provision making time of essence

Q. So when you asked the if they would be interested in buying your property, did they express such an interest?

A. Yes.Q. You didn't list the property for sale with a real estate agent?A. No.Q. Why not?A. I figured if the [purchasers] wanted to buy my property, I wouldn't need a real estate

broker and could avoid paying a real estate commission.Q. So you entered into a contract with them for the purchase and sale of your property?A. Yes.[Counsel requests Court Reporter to mark exhibit.]Q. Please take a look at this document, which has been previously admitted into evidence by

stipulation of the parties as plaintiff's Exhibit __, and state whether you have ever seen it before.A. I have.Q. What is it?A. This is the contract between me and the [purchasers] for the sale and purchase of my

property.Q. Is this contract signed by you and the [purchasers]?A. Yes, it is.Q. Is it dated?A. Yes. It's dated July 5, 2000.Q. What is the purchase price of the subject property as provided for in this contract?A. It was $183,300.Q. Can you describe the terms whereby the purchase price was to be paid?

A. The contract called for a down payment of $9,165 upon signing of the contract, and the remaining balance of $174,135 was to be paid on the date of closing.

Q. Who drafted the contract?A. The [purchasers] brought over a standard form contract and we just made a few

modifications to it.Q. Did you have your attorney review the contract before you signed it?A. Yes.Q. You read the contract before signing it?A. Yes.Q. So you are familiar with its terms?A. Yes.Q. Is there any time specified in the contract regarding a closing date for the transaction?A. Yes.Q. Can you locate that provision in the contract and read it to the court?A. Sure. Paragraph __ states that "The closing of the transaction contemplated by this

Agreement (Closing) shall occur at the offices of [name of seller's attorney], [address], on July 31, 2000, 2 p.m. or at such other place, date and/or time as the parties shall agree."

Q. Okay. So the closing was to take place at your attorney's office on July 31, 2000?A. Right.Q. Is there any other language in the contract specifically stating that this closing date, July

31, 2000, was critical or essential to the transaction?A. Just the liquidated damages provision.Q. What are you referring to when you mention the liquidated damages provision?A. It says here in paragraph __ that "in the event that buyers fail to perform their obligations

under this agreement, seller shall have the right to terminate this agreement upon written notice of default to buyers, whereupon seller shall have the right to retain, as liquidated damages, all sums paid by buyers pursuant to paragraph __ of this agreement."

Q. But there is no language in that provision specifically referring to the closing date, right?A. Not exactly, but since the [purchasers] didn't meet the closing date, they were in default

and we sent them notice to that effect.Q. Can you point out any language in the contract that specifically states that the closing date

is essential or critical to the purchase and sale of the property?A. No.Q. You can't locate any language stating that time is of the essence of the agreement, or

similar language to that effect?A. No.

§ 30. Lack of intent to make time of the essence

Q. Alright. Before signing the contract, did you have any discussions with the [purchasers] regarding the need to close the sale by a certain date?

A. Yes. I told them that I had to complete the sale by the end of the summer because I needed a portion of the proceeds of the sale to purchase a condominium that I had agreed to buy.

Q. Before you entered into the contract with the [purchasers], you had already signed an agreement to buy a condominium?

A. Yes.Q. Was there a closing date set for your purchase of the condominium?

A. Yes. The closing date was set for September 30, 2000, and I would lose my $9,500 down payment if I didn't pay the balance of the purchase price on that date.

Q. What was the purchase price of the condominium?A. $95,000. I was planning on paying the remaining $85,500 out of the proceeds from the

sale of my property.Q. What made you think that you would forfeit your $9,500 down payment if you didn't pay

the balance of the purchase price by the September 30 closing date?A. That's the way that the contract was worded. It said that time was of the essence and that if

I failed to pay the purchase price at closing the seller could terminate the contract and keep my down payment.

Q. You said that time was made of essence with regard to the closing date for the condominium purchase?

A. Right.Q. That contract specifically states that time is of the essence?A. Right.Q. You signed that contract before you signed the contract with the [purchasers] for the

purchase and sale of your property?A. Yes.Q. Since there was specific language in the condominium contract stating that time was of

the essence, didn't you consider including such language in your contract with the [purchasers] for the purchase and sale of your property?

A. It wasn't in the form contract that we used so I didn't give that much thought to it.Q. Didn't you say that you made some modifications to the form contract before signing it?A. Yes. We made a few modifications, mostly to simplify it and delete some things that we

didn't think were important or applicable to our situation.Q. So you could have modified the contract to state that time was of the essence if you

wanted to?A. I guess I could have.Q. But you didn't, right?A. Right.Q. And based on your condominium contract, which you signed before entering into the

contract with [purchasers], you were at least aware that you could have included a time of the essence requirement concerning the closing date?

A. I guess so.

§ 31. Extension of closing date; seller's notice making time of essence

Q. Prior to the July 31, 2000 closing date stated in your contract with the [purchasers], did the [purchasers] tell you that they needed more time to close?

A. Yes. They told me that they needed an extra two weeks to get their mortgage loan.Q. When did the [purchasers] notify you that they needed more time to close?A. Mr. [purchaser] came over to my place on July 20th and told me that he'd like to

reschedule the closing for August 14th because he needed a little more time to make arrangements with his bank with regard to his mortgage.

Q. And how did you respond?

A. I told him that I didn't have a problem with August 14th, but couldn't afford to let the closing drag on too long because I needed to close my deal on the condominium on September 30th.

Q. So you went ahead and rescheduled the closing for August 14th?A. Yes. I contacted my attorney and we rescheduled the closing for August 14th but we

decided to make that the final deadline so as not to jeopardize my purchase of the condominium. So then we went sent a letter to the [purchasers] stating that we agreed to the extension but that the August 14th closing date was of the essence.

[Counsel requests Court Reporter to mark exhibit.]Q. Please take a look at this document, which has been marked for identification purposes as

plaintiff's Exhibit __, and state whether you have ever seen it before.A. I have.Q. What is it?A. It is the letter that my attorney sent to [purchasers] extending the closing date and stating

that time is of the essence.Q. Is this your attorney's signature?A. Yes, it is.Counsel: I offer this letter, marked for identification as plaintiff's Exhibit __, into evidence as

plaintiff's Exhibit __.Q. Please read the letter for the benefit of the court.A. [Witness reads letter stating that seller "is granting a final adjournment of closing until

August 14, 2000," at the office of the defendant's attorney, that "time is of the essence as to this date," and that in the event the purchaser "fails to close title on that date," the seller would "have no alternative but to hold you in default".]

Q. Did the [purchasers] respond to this letter?A. No.

§ 32. Seller's refusal to grant adjournment of extended closing date

Q. Did you hear from the [purchasers] before the rescheduled closing date of August 14th?A. Yes. On August 10th, Mr. called me on the phone and told me that he was having a

problem with his mortgage and that he needed until August 17th to close.Q. How did you respond?A. I told him that I was sorry to hear about his troubles but that I couldn't delay the sale any

longer because of my pending purchase of the condominium, and that I had no choice but to cancel the contract if he didn't show up for the closing on August 14th.

Q. But didn't he assure you that he could close only three days later, on August 17th?A. That's what he said, but I was afraid he wouldn't come through on the 17th either.Q. Didn't he explain the circumstances why he needed three more days?A. He said something about a tax lien on his property that hadn't been removed from the

county records. He told me that the lien had been paid off years ago but that the bank needed verification that the lien had been satisfied before it would give final approval of the loan.

Q. So how did you leave things on that occasion?A. I told him that I hoped that he would show up at the August 14th closing because that was

as long as I could afford to wait.

§ 33. Seller's lack of good faith

Q. You said that you needed to close your condominium deal on September 30th, right?A. Right.Q. So if you agreed to close the sale on your property with the [purchasers] on August 17th,

instead of August 14th, it really wouldn't have affected your condominium purchase, would it have?

A. I guess not.Q. So do you think that it was such an unreasonable request by the [purchasers] to extend the

closing to August 17th?A. At the time, I felt that I couldn't chance any further delay of the closing.Q. Did the [purchasers] show up for the August 14th closing?A. No.Q. Were you present at your attorney's office on August 14th prepared to close on that date?A. Yes. I was at my attorney's office on August 14th with the deed of conveyance, but the

[purchasers] didn't show up.Q. On August 14th, while at your attorney's office, did [purchasers] fax any correspondence

regarding the closing?A. Yes. They faxed a letter again requesting an August 17th closing date.Q. Did you see that letter?A. Yes.Q. Other than requesting an August 17th closing date, did that letter state anything about the

approval of the [purchasers] mortgage loan?A. Yes.Q. What did the letter indicate about the approval of the [purchasers] mortgage loan?A. It said that the mortgage loan had been approved.Q. Did the letter explain why the [purchasers] could not close on August 14th even though

the loan had been approved?A. Yes.Q. What did it state in that regard?A. It said that the loan had been approved but that the [purchasers] needed until August 17 to

close because the bank required a couple of days to prepare all of the necessary loan documentation.

Q. Were there any attachments to the August 14th letter?A. Yes. There was a letter from the bank stating that the loan had been approved.Q. So after the [purchasers] didn't attend the closing at your attorney's office on August 14th,

what course of action did you take?A. We sent a letter to your office [purchasers' attorney] advising the [purchasers] that I was

canceling the contract and keeping their down payment as liquidated damages because they had defaulted on the agreement by failing to close on August 14th.


plaintiff's Exhibit __, and state whether you have ever seen it before.A. I have.Q. What is it?A. It is the letter that my attorney sent to [purchasers] notifying them that I was canceling the

contract and keeping their down payment as liquidated damages.Q. What is the date of the letter?

A. August 15, 2000.Q. Is this your attorney's signature?A. Yes, it is.Counsel: I offer this letter, marked for identification as plaintiff's Exhibit __, into evidence as

plaintiff's Exhibit __.Q. Please read the letter for the benefit of the court.A. [Witness reads letter stating that as a consequence of the purchasers' failure to appear for

the August 14th closing, and the prior declaration that time was of the essence, the purchasers were in default, and that the seller was terminating the contract and retaining the down payment as liquidated damages.]

Q. You decided to declare the purchasers in default even though you knew that the loan had been approved and the [purchasers] only needed three more days to allow their bank to prepare the necessary loan documentation?

A. I had no guarantee that they would be able to close three days later, so I had to move quickly to find another buyer for my property before the September 30 closing on my condominium.

Q. Isn't it a fact that the [purchasers] appeared at your attorney's office on August 17 with all the necessary loan documentation and a check for $174,135 but that your attorney refused to close the sale?

A. Yes.Q. So you could have closed the deal on August 17 but you chose not to?A. No. I couldn't sell the property to them because I signed another contract to sell the

property to another buyer on August 15th.Q. So the same day that you sent notice to the [purchasers] cancelling your contract with

them, you signed another contract to sell the property to another buyer?A. Yes.Q. And what was the closing date contemplated in that contract with the other buyer?A. September 16, 2000.Q. Did that contract make time of the essence as to the September 16 closing date?A. Yes.Q. So why were you able to agree to a September 15th closing date when your justification

for canceling the contract with the [purchasers] was that you were concerned that the sale wouldn't be completed in time to close your purchase of the condominium on September 30, 2000.

A. I had no guarantee that the [purchasers] would come through on August 17th, and since I had already signed the contract with [other buyers] on August 15th, there was no turning back.

Q. You couldn't have waited two more days just to see if the [purchasers] would appear for an August 17th closing before signing the contract with the other buyers?

A. I guess I could have waited two more days.Q. Isn't it true that you had already shown the property to the other buyers prior to the August

14th closing date?A. Yes.Q. When did you show your property to the other buyers?A. On August 1, 2000.Q. Did they express an interest in buying your property that day?A. Yes.

Q. So you were already in the process of arranging a possible sale to these other buyers well before the scheduled closing date of August 14, 2000, correct?

A. Well, I had to have a backup in case the deal with the [purchasers] fell through.Q. Did you tell these other buyers that you had entered into a contract with the [purchasers]?A. Yes. I told them that I could only sell my property to them if the deal with the

[purchasers] fell through.Q. So after the [purchasers] didn't attend the August 14th closing, you wasted no time in

signing the contract to sell the property to the other buyers?A. I had the right to do that since the [purchasers] didn't meet the August 14th deadline.Q. What was the purchase price agreed upon in the contract that you signed with the other

buyers on August 15, 2000?A. $207,000.Q. In other words, these other buyers were going to pay you almost $24,000 more for the

property than the [purchasers]?A. Right.Q. Okay, Mr. . Those are all of the questions that I have.

B. Testimony of Plaintiff-Purchaser

§ 34. Relationship between parties

Q. Okay, Mr. [purchaser]. How long have you been acquainted with the defendant in this case, Mr. [seller]?

A. I first met him nine years ago in 1991. That year, my wife and I purchased the house next door to his. Shortly after we moved in, he and his wife came by to introduce themselves and welcome us to the neighborhood. Then, over the years, the four of us became good friends. We often had cookouts together and sometimes played pinochle in the evenings. I went on fishing trips with Mr. on several occasions and we had a lot of fun.

Q. So would you say that you were good friends with Mr. ?A. Definitely. At least until this dispute came about.Q. You mean this lawsuit concerning the sale of his property?A. Right.

§ 35. Offer and acceptance

Q. How did it come about that you were presented with the opportunity to purchase Mr. [seller]'s property?

A. Well, after Mr. 's wife died three years ago, he kept talking about moving to a smaller place with less upkeep and maintenance, such as a condominium. One day, near the end of June, he came by and told us that he had decided to sell. He said that he had had the property appraised the previous summer, that it was valued at $188,000, and that that was his asking price. He said that he would like to give us the first chance to buy the property if we were interested, but that he needed a decision from us by July 5th, if possible, because if we weren't interested, he wanted to list it for sale with a real estate broker.

Q. How did you respond when he told you all of this?A. We told him that we understood his decision and that we would think it over and get back

to him by the Fourth of July weekend.

Q. And then what did you do?A. My wife and I talked it all over that same evening and decided that we would buy the

property. We always liked the place. It was nicer than ours and we figured that we would move into his house and use ours as a rental property.

Q. So when did you tell Mr. [seller] that you had decided to buy his property?A. Well, the day after his visit, we went by his place and told him that we wanted to buy, but

that we still needed to review our finances and see about obtaining a mortgage from the bank.Q. So how were matters left that day?A. We told him that we would find out about a loan and get back to him as soon as we could.

Then, the following day, we made an appointment to meet with a loan officer at National Bank.Q. So you met with a loan officer to discuss obtaining a mortgage loan?A. Right. Later that week, we met with a Mr. at National Bank to see about a mortgage.Q. And how did that go?A. Well, we met with him and told him how we wanted to buy [seller]'s property and that we

needed a mortgage of around $140,000 to make the purchase.Q. How did he respond to that?A. Well, he advised us that it shouldn't be a problem with the equity in our existing home. He

gave us a loan application to complete and told us to bring it back with a copy of the purchase and sale agreement for Mr. 's property and then he would get the loan process started.

§ 36. Execution of real estate contract

Q. And did you enter into a written agreement with Mr. [seller] for the purchase and sale of his property?

[Counsel requests Court Reporter to mark exhibit.]Q. Please take a look at this document, which has previously been admitted into evidence as

plaintiff's Exhibit __, and state whether you have ever seen it before.A. I have.Q. What is it?A. This is the contract between [seller] and us for the sale and purchase of his property.Q. Is it dated?A. Yes. It's dated July 5, 2000.Q. And what is the purchase price of the subject property as provided for in this contract?A. It was $183,300.Q. You said earlier that Mr. 's had been appraised the previous year at $188,000, didn't you?A. Yes. But since we weren't using a real estate broker, we decided to split the savings on the

broker's fee. We figured that a broker would have earned a $9,400 commission on the sale so we split that amount in half and deducted it from the $188,000 appraised value.

Q. And since you weren't using the services of a broker, who drafted the real estate contract?A. We obtained a standard form contract from the office supply store and just made a few

modifications to it.Q. Alright. So what are the payment terms in the contract?A. We had to pay a down payment of $9,165 upon signing of the contract, and then pay the

remaining balance of $174,135 on the date of closing.Q. Did you put down any earnest money when the contract was signed?A. Yes. We made a down payment of $9,165 when we signed the contract.

§ 37. Closing date specified in contract; absence of time of essence clause

Q. Does the contract set a scheduled closing date?A. Yes. The closing date was set for July 30, 2000 to give us time to obtain financing. We

were planning on paying another $34,135 from our savings account and also obtain a mortgage loan for the remaining $140,000 by that date.

Q. Can you locate the provision in the contract pertaining to the closing date and read it to the court?

A. Sure. Paragraph __ states that "The closing of the transaction contemplated by this Agreement (Closing) shall occur at the offices of [name of seller's attorney], [address], on July 31, 2000, 2 p.m. or at such other place, date and/or time as the parties shall agree."

Q. Is there any other language in the contract specifically stating that this closing date, July 31, 2000, was critical or essential to the transaction?

A. No.

§ 38. Purchaser's understanding that time not of essence

Q. At the time of contract signing, did Mr. [seller] make any statements to you regarding the July 31, 2000 closing date?

A. Not really.Q. Did he say anything to indicate that he would cancel the contract if you didn't meet the

July 31, 2000 closing date?A. No.Q. Did he say anything about where he was planning to move after completing the sale of his

property?A. Yes. He told us that he was going to use a portion of the proceeds from the sale of his

property to buy a condominium in [town].Q. Did he indicate whether or not he had signed a contract to purchase this condominium?A. Yes. He said that the sale on the condominium was set to close on September 30th, so he

needed to complete the sale of his property before that date.

§ 39. Special arrangements made to accommodate seller

Q. Do you know where he was planning to live if the sale of his property were completed on July 31, 2000, as contemplated by the contract?

A. Yes. We discussed that. We told him that he could remain in his house until the September 30 closing date on his condominium. Otherwise, he would have to move all of his belongings to storage and live in a hotel for two months until the condominium was available.

Q. Was any provision included in the contract concerning his occupancy of the property until September 30, 2000?

A. No. We just verbally agreed that he could stay in the house until the end of September.Q. Was he supposed to pay you any rent for that period of occupancy?A. No. We told him that he was welcome to stay through the end of September, but that if

something happened to delay the condominium deal past September 30, that we would have to work out some kind of rental arrangements beginning on October 1.

Q. Didn't you state previously that you were planning on moving into his house and using your own house as a rental property?

A. Yes.Q. So by allowing him to stay in his house after the sale, wouldn't that cause you to delay

renting out your own house during that period?A. Yes, that's true, but we considered him a friend and he did split his savings on the

brokerage commission with us by reducing the original asking price for the property by $4,700.

§ 40. Purchaser's request for extension of closing date

Q. So did the sale of the property close on July 31, 2000 as originally scheduled in the contract?

A. No. It became apparent to us that the July 31st closing date was not going to give us enough time to get our mortgage loan so we told [seller] that we needed an extra two weeks for the closing.

Q. When did you notify Mr. [seller] that you needed this additional time to close?A. I went over to [seller]'s house on July 20th and told him that we'd like to reschedule the

closing for August 14th because we needed a little more time to make arrangements with our bank with regard to his mortgage.

Q. And how did he respond?A. He said that he didn't have a problem with August 14th, but that we needed to keep in

mind that he needed to close his deal on the condominium on September 30th.Q. So you went ahead and rescheduled the closing for August 14th?A. Yes.

§ 41. Seller's notice making time as essence

Q. After your conversation with Mr. [seller] at his house on July 20, 2000, did you hear any further word from him about the rescheduled closing date of August 14th.

A. Yes. I was rather surprised to receive a certified letter from his attorney stating that [seller] agreed to the extension but that the August 14th closing date was now of the essence.

Q. Please take a look at this document, which has previously been admitted into evidence as plaintiff's Exhibit __, and state whether you have ever seen it before.

A. Yes. I have. It is the letter from [seller]'s attorney extending the closing date to August 14th and stating that time is of the essence.

Q. What did you think when you read this letter?A. I was flabbergasted. I couldn't believe that he was suddenly so insistent on closing on

August 14th and that he would consider us in default if we failed to meet that deadline.Q. Why were you so dismayed?A. Well, first of all he led me to believe that August 14th was no big deal and that as long as

we closed the sale before he needed the money for the closing on his condominium everything would be fine. Then, I felt kind of betrayed because I thought that he was my friend and we were being gracious enough to let him stay in the house until he could move into his condominium.

Q. Did you respond to this letter?A. No. I took offense to the letter and just decided that we would do our best to make sure

that the sale closed on August 14th.

§ 42. Purchaser's request for further extension

Q. And did the sale close on August 14th?A. No. Unfortunately, we ran into some difficulties with approval of the loan.Q. What difficulties?A. On August 10th, the loan officer called and told me that the bank's attorney had

discovered that a state tax lien had been filed against our property in the county court house. He said that the loan couldn't be approved until I had the tax lien removed.

Q. How did you respond to this turn of events?A. Well, years ago I did experience some financial problems and got behind on my state

income tax payments. A lien was filed against our property at that time but I entered into an installment agreement with the state and paid off the back taxes in full. I thought that the lien had been removed after I paid the taxes, but apparently it had not. I told the loan officer that if the lien was a mistake that it should have been removed years ago and that I thought that it had been removed.

Q. What did the loan officer advise you to do?A. He said that I would have to contact the state division of taxation and have them prepare a

letter of accord and satisfaction verifying that the taxes had been paid in full and that the tax lien would be removed from the county records. He said that he couldn't get approval of the loan without a copy of this letter from the state tax division.

Q. So what did you do then?A. First, I called the state division of taxation to see about the letter verifying that the tax lien

had been satisfied and that the lien would be removed from the county records.Q. How did that go?A. There was no problem getting the letter I needed but it couldn't be prepared until the next

day, which was Friday, August 11th, and the best they could do was mail the letter that day and fax me a copy of it.

Q. What did you do next?A. I called [seller] on the phone and told him about the problem with the loan and that would

need until August 17th to close.Q. How did you respond?A. He said that he had no choice but to cancel the contract if I didn't show up for the closing

on August 14th.Q. But didn't you assure him that you would be able to close only three days later, on August

17th?A. Sure. But he just wasn't willing to wait until the 17th.Q. Did you explain the circumstances why you needed three more days?A. Sure. I told him all about the problem with the tax lien and how the bank needed

verification that the lien had been satisfied before it would give final approval of the loan. I assured him that as soon as I received the letter from the state tax division on August 11th that the loan would be approved and that all I needed was a couple of days for the bank to process the necessary loan documentation.

Q. How did he respond?A. He just said that he hoped that I would show up at the August 14th closing because that

was as long as he was willing to wait.Q. Did you respond to this remark?

A. I said that I didn't understand his attitude and didn't see what difference three more days could possibly make, and just hung up the phone.

§ 43. Purchaser's ability to perform within reasonable period of time from seller's notice

Q. So then what did you do after your phone conversation with Mr. [seller] on August 10th?A. The next day I received a fax copy of the letter from the state tax division verifying that

the tax lien had been satisfied and that the lien would be removed from the county records. I then took a copy over to the bank and the loan officer told me that he was sure that the loan could now be approved and that he'd get back to me on Monday morning about the approval.

Q. So he was going to get back to you on Monday, August 14th, the date set for closing?A. Right.Q. Did you explain that the closing was supposed to take place on August 14th?A. Yes. But he said that Monday morning was the best he could do.Q. So did you get the loan approval that Monday?A. Yes. The loan officer phoned me around 10:00 a.m and told me that the loan had been

approved but that it would take until Thursday, August 17th to prepare all of the necessary loan documentation.

Q. So what did you do then?A. I asked if he could just prepare a letter stating that the loan had been approved, that the

loan documentation would be ready on August 17th, and that the bank would be available with the loan documentation to attend a closing on August 17th.

Q. And did the bank prepare such a letter for you?A. Yes. I went over to the bank and picked up the letter around 1:00 p.m. and then took the

letter over to your office [purchasers' attorney]. We faxed a copy of the letter to [seller's attorney] at 2:00 p.m., the time scheduled for the closing, and had another copy hand-delivered at 2:30 p.m.

Q. Was a cover letter included with the copy of the letter from the bank?A. Yes.Q. Can you summarize the content of the cover letter?A. Yes. In the cover letter, we stated that the loan had been approved and requested an

extension of the closing date to August 17th to allow time for the bank to prepare the necessary loan documentation.


plaintiff's Exhibit __, and state whether you have ever seen it before.A. I have.Q. What is it?A. It is the letter stating that the loan had been approved and requesting an extension of the

closing date to August 17th.Q. Is this your attorney's signature?A. Yes.Q. Any attachments to the letter?A. Yes, attached is the letter from the bank stating that the loan had been approved.Counsel: I offer this letter and attachment, marked for identification as plaintiff's Exhibit __,

into evidence as plaintiff's Exhibit __.Q. Please read the letter for the benefit of the court.

A. [Witness reads letter stating that the loan had been approved, and requesting an extension of the closing date to August 17th to allow time for the bank to prepare the necessary loan documentation.]

Q. Please also read the attached letter from the bank.A. [Witness reads letter from bank stating that the loan had been approved, that the loan

documentation would be ready on August 17th, and that the bank would be available with the loan documentation to attend a closing on August 17th.]

§ 44. Seller's notice of default

Q. What transpired after this correspondence, Plaintiff's Exhibit __, was faxed to the office of Mr. [seller]'s attorney?

A. The following day, August 15th, a letter was hand-delivered to your office [purchasers' attorney] from [seller] stating that he was canceling the contract and keeping our down payment as liquidated damages because we had defaulted on the agreement by failing to close on August 14th.

§ 45. Purchaser's rejection of default notice; tender of performance rejected by seller

Q. And did you respond to this letter?A. Yes. We had a letter hand-delivered to [seller's attorney] on August 15th stating that we

would appear at the office of [seller's attorney] at 2 p.m. on August 17th prepared to close unless advised that an alternate time of day would be more convenient.


plaintiff's Exhibit __, and state whether you have ever seen it before.A. I have.Q. What is it?A. It is the letter dated August 15th stating that we would be prepared to close on August

17th.Q. Is this your attorney's signature?A. Yes.Counsel: I offer this letter, marked for identification as plaintiff's Exhibit __, into evidence as

plaintiff's Exhibit __.Q. Please read the letter for the benefit of the court.A. [Witness reads letter stating that purchasers would appear at the office of the seller's

attorney at 2 p.m. on August 17th ready, willing, and able to close. The letter also advised the seller that the contract did not make time of the essence and that the seller's notice to that effect constituted only a unilateral declaration by the seller, and that the seller's notice making time of the essence did not, in any case, afford the purchasers a reasonable time to perform. The letter also rejected the default notice and again confirmed the purchasers' willingness to close on August 17th.]

Q. Did you receive any reply to this letter?A. No.Q. Did you appear at the office of [seller]'s attorney on August 17th to close the sale of the

property?

A. Yes. We were there at 2 p.m. with the necessary loan documentation and a check for $173,135.

Q. And what occurred?A. Mr. [seller]'s attorney wouldn't accept our payment and refused to close.

VI. Model Jury Instructions

§ 46. Waiver of time of essence clause in real estate contract

"I charge you that if time is of the essence of a contract, it may be waived and subsequent conduct of the obligor may have that effect."[FN1]

§ 47. Waiver of strict compliance with closing date

"I charge you that if you find that after the expiration of the specified closing date the defendant continued to act as if the contract was not at an end, then you may find that the defendant waived any right to insist upon strict compliance with the closing date set forth in the contract as amended."[FN1]

§ 48. Defaulting party's nonperformance caused by conduct of other party

"[I]f you find that changes and additions requested by a party delay construction so that the sale could not be closed on the scheduled closing date, then you may find that the party's conduct caused the non-performance and may enforce the terms of the contract, notwithstanding the expiration of the closing date."[FN1]

West's Key Number Digest

West's Key Number Digest, Contracts 213West's Key Number Digest, Specific Performance 93West's Key Number Digest, Vendor and Purchaser 78

Primary Authority

Federal Rules of Evidence, 28 U.S.C.A

Fed. R. Civ. Proc. 43(b)

A.L.R. Library

A.L.R. Index: Contracts; Default; Estoppel and Waiver; Executory Contracts; Forfeiture; Liquidated Damages; Notice; Options; Real Property; Rescission; Sale and Transfer of Property; Specific Performance; Time of Essence; Title and Ownership; Vendor and Purchaser

A.L.R. Digest: Contracts § 266

A.L.R. Digest: Sale § 9

A.L.R. Digest: Vendor and Purchaser § 6

Enforcement of Arbitration Agreement Contained in Real Estate Contract by or Against Nonsignatory Under State Law, 10 A.L.R. 6th 669

Provision in land contract for liquidated damages upon default of purchaser as affecting right of vendor to maintain action for damages for breach of contract, 39 A.L.R. 5th 33

Excessiveness or adequacy of attorneys' fees in matters involving real estate—modern cases, 10 A.L.R. 5th 448

Necessity of real-estate purchaser's election between remedy of rescission and remedy of damages for fraud, 40 A.L.R. 4th 627

Sufficiency of tender of payment to effect defaulting vendee's redemption of rights in land purchased, 37 A.L.R. 4th 286

Waiver or estoppel as to notice requirement for exercising option to renew or extend lease, 32 A.L.R. 4th 452

Necessity and reasonableness of vendor's notice to vendee of requisite time of performance of real-estate sales contract after prior waiver or extension of original time of performance, 32 A.L.R. 4th 8

Vendor's action against vendee's prospective lender for misrepresentation respecting or failure to complete loan commitment, 30 A.L.R. 4th 474

Vendor and purchaser: recovery for increased mortgage interest costs where vendor fails or refuses to convey, 28 A.L.R. 4th 1078

Application of provision in land purchase agreement that it shall be null unless marketable title is delivered, where defect in title is created or permitted by vendor subsequent to execution of agreement, 13 A.L.R. 4th 927

Modern status of defaulting vendee's right to recover contractual payments withheld by vendor as forfeited, 4 A.L.R. 4th 993

Excess of payment for one period as applicable to subsequent period under contract or mortgage providing for periodic payments, 89 A.L.R. 3d 947

Timeliness of notice of exercise of option to purchase realty, 87 A.L.R. 3d 805

Time in which option created by will to purchase real estate is to be exercised, 82 A.L.R. 3d 790

Sufficiency of real-estate buyer's efforts to secure financing upon which sale is contingent, 78 A.L.R. 3d 880

Failure of vendor to comply with statute or ordinance requiring approval or recording of plat prior to conveyance of property as rendering sale void or voidable, 77 A.L.R. 3d 1058

Necessity for payment or tender of purchase money within option period in order to exercise option, in absence of specific time requirement for payment, 71 A.L.R. 3d 1201

Specific performance of land contract notwithstanding failure of vendee to make required payments on time, 55 A.L.R. 3d 10

Applicability of statute of frauds to agreement to rescind contract for sale of land, 42 A.L.R. 3d 242

Comment Note.—The parol evidence rule and admissibility of extrinsic evidence to establish or clarify ambiguity in written contract, 40 A.L.R. 3d 1384

Zoning or other public restrictions on the use of property as affecting rights and remedies of parties to contract for the sale thereof, 39 A.L.R. 3d 362

Purchaser's misrepresentations as to intended use of real property as ground for vendor's equitable relief from contract and deed, 35 A.L.R. 3d 1369

Validity of option to purchase realty as affected by indefiniteness of term provided for exercise, 31 A.L.R. 3d 522

Holding over under lease, or renewal or extension thereof, as extending time for exercise of option to purchase contained therein, 15 A.L.R. 3d 470

Vendor and purchaser: recovery for loss of profits from contemplated sale or use of land, where vendor fails or refuses to convey, 11 A.L.R. 3d 719

Venue of damage action for breach of real-estate sales contract, 8 A.L.R. 3d 489

Circumstances justifying delay in rescinding land contract after learning of ground of rescission, 1 A.L.R. 3d 542

Pleading of election of remedies, 99 A.L.R. 2d 1315

Comment Note.—Contractual provision as to remedy as excluding other possible remedies, 84 A.L.R. 2d 322

Venue of action for rescission or cancellation of contract relating to interests in land, 77 A.L.R. 2d 1014

What constitutes abandonment of land contract by vendee, 68 A.L.R. 2d 581

Effect of failure of contract for sale or exchange of real estate to specify time for giving of possession, 56 A.L.R. 2d 1272

Redemption rights of vendee defaulting under executory land sale contract after foreclosure sale or foreclosure decree enforcing vendor's lien or rights, 51 A.L.R. 2d 672

Comment Note.—What law governs in determining whether facts and circumstances operate to terminate, breach, rescind, or repudiate a contract, 50 A.L.R. 2d 254

Validity, construction, and effect of land sale contract providing that title must be satisfactory to purchaser, 47 A.L.R. 2d 455

Deed as superseding or merging provisions of antecedent contract imposing obligations upon the vendor, 38 A.L.R. 2d 1310

Right to recover, in action for breach of contract, expenditures incurred in preparation for performance, 17 A.L.R. 2d 1300

Failure to object to parol evidence, or voluntary introduction thereof, as waiver of defense of statute of frauds, 15 A.L.R. 2d 1330

Nature of deed which may be required of vendor who is unable to convey title for which he has contracted, 13 A.L.R. 2d 1462

Change of conditions after execution of contract or option for sale of real property as affecting right to specific performance, 11 A.L.R. 2d 390

Specific performance of contract for sale of real property as affected by provision making it conditional upon purchaser's obtaining loan, 5 A.L.R. 2d 287

Construction and application of Real Estate Settlement Procedures Act of 1974 (12 U.S.C.A. § 2601), 142 A.L.R. Fed. 511

Construction of provision of 15 U.S.C.A. § 1702(a)(2) exempting from Interstate Land Sales Full Disclosure Act (15 U.S.C.A. secs. 1701-1720, as amended) sale or lease of land under contract obligating seller or lessor to erect building thereon within period of two years, 118 A.L.R. Fed. 647

Legal Encyclopedias

Am. Jur. 2d, Contracts §§ 483 to 492

Am. Jur. 2d, Contracts § 549

Am. Jur. 2d, Estoppel and Waiver §§ 154, 158

Am. Jur. 2d, Vendor and Purchaser § 39

Am. Jur. 2d, Vendor and Purchaser §§ 49 to 51





Am. Jur. 2d, Witnesses § 494



Am. Jur. 2d, Witnesses §§ 422, 423

Treatises and Practice Aids

D. Dobbs, Dobbs Law of Remedies (2d ed.)

Williston on Contracts (4th ed.)

Trial Strategy

Real Estate Broker's Recovery of Commission When Buyer or Seller Defaults on Contract of Sale, 91 Am. Jur. Proof of Facts 3d 1

Real-Estate Purchaser Not Ready, Willing, and Able to Make Payment Due at Closing, 69 Am. Jur. Proof of Facts 3d 99

Real-Estate Broker's Breach of Fiduciary Duty to Seller-Principal by Failing to Disclose Material Facts About or Certain Dealings With Purchaser, 65 Am. Jur. Proof of Facts 3d 109





Proof of Circumstances Establishing Purchaser's Waiver of Right to Rescind Real Estate Contract, 57 Am. Jur. Proof of Facts 3d 287

Circumstances Establishing Purchaser's Abandonment of Real Estate Contract, 56 Am. Jur. Proof of Facts 3d 335

Slander or Disparagement of Title to Real Property, 55 Am. Jur. Proof of Facts 3d 509

Real Estate Purchaser's Rights and Remedies Where Seller Unable to Convey Marketable Title, 52 Am. Jur. Proof of Facts 3d 429

Proof of Fraudulent Inducement of a Contract and Entitlement to Remedies, 48 Am. Jur. Proof of Facts 3d 329

Establishing Agency by the Circumstances in Real Estate Transactions, 45 Am. Jur. Proof of Facts 3d 453

Introduction of Evidence Over Parol Evidence Rule Objection, 36 Am. Jur. Proof of Facts 3d 331

Attorney Malpractice in Real Estate Transactions, 27 Am. Jur. Proof of Facts 3d 353

Real Property Contracts—Specific Performance With Abatement of Purchase Price, 19 Am. Jur. Proof of Facts 3d 543

Lessee's Excusable Failure To Give Timely Notice Exercising Option To Renew Lease, 50 Am. Jur. Proof of Facts 2d 519

Recovery for Part Performance of Contract, 43 Am. Jur. Proof of Facts 2d 523

Acts Constituting Rejection of Contract Offer, 27 Am. Jur. Proof of Facts 2d 605

Offeree's Acceptance of Contract Offer, 27 Am. Jur. Proof of Facts 2d 559

"Impossibility" of Performing Contract, 24 Am. Jur. Proof of Facts 2d 269

Timeliness of Optionee's Notice To Exercise Option To Purchase Real Property, 15 Am. Jur. Proof of Facts 2d 583

Equitable Relief From Execution—Circumstances of Sale, 10 Am. Jur. Proof of Facts 2d 285

Payment Made for Unexercised Option To Purchase Rather Than as Down Payment, 9 Am. Jur. Proof of Facts 2d 495

Purchaser Not Ready, Willing, and Able To Make Closing Payment, 9 Am. Jur. Proof of Facts 2d 115

Voidableness of Release, 8 Am. Jur. Proof of Facts 2d 617

Warranty Deed Intended as Mortgage, 4 Am. Jur. Proof of Facts 2d 567

Damages Provision Affecting Remedies for Purchaser's Default on Real Estate Contract, 91 Am. Jur. Trials 333

Resolving Real Estate Disputes Through Arbitration, 79 Am. Jur. Trials 159

Resolving Real Estate Disputes through Arbitration, 27 Am. Jur. Trials 621

Tactics and Strategies of Pleading, 3 Am. Jur. Trials 681

Selecting the Remedy, 3 Am. Jur. Trials 637

Preparing and Using Maps, 2 Am. Jur. Trials 669

Selecting and Preparing Expert Witnesses, 2 Am. Jur. Trials 585

Locating Public Records, 2 Am. Jur. Trials 409

Cause of Action of Vendor to Terminate Contract for Sale of Real Property and Recover Possession of Realty on Basis of Buyer's Nonperformance Under Contract, 25 Causes of Action 731

Cause of Action Against Seller to Recover Damages for Breach of Contract for Sale of Real Property, 9 Causes of Action 183

Forms

Am. Jur. Legal Forms 2d, Real Estate Sales § 219:823

Am. Jur. Legal Forms 2d, Time of the essence provisions—real estate contracts §§ 219:641 to 219:644

Am. Jur. Legal Forms 2d, Vendor's notice to purchaser to perform § 219:825

Am. Jur. Pleading and Practice Forms, Vendor and Purchaser § 4

Am. Jur. Pleading and Practice Forms, Vendor and Purchaser § 31

Law Reviews and Other Periodicals

77 Classic Contract Mistakes and How to Avoid Them, (Reviewed), 76 Law Inst. J. 31 (2002 WL 2002453)

Actual and virtual specific performance, the theory of efficient breach, and the indifference principle in contract law, 93 Cal. L. Rev. 975 (2005 WL 2704357)

Against supercompensation: a proposed limitation on the land buyer's right to elect between damages and specific performance as a remedy for breach of contract, 35 Loy. U. Chi. L.J. 555 (2004 WL 1791200)

Appraising a presumption: a modern look at the doctrine of specific performance in real estate contracts, 47(2) Wm. & Mary L. Rev. 697 (2005 WL 3597762)

A Practical Guide to Commercial Real Estate Transactions: From Contract to Closing, (Reviewed), 59 Bench & B. Minn. 8 (2002 WL 1307251)

Calculation of a reasonable time to complete when time is at large, 23(2) Int'l Construction L. Rev. 167 (2006 WL 1563432)

Insisting on time of essence closing may backfire, N.J.L.J., January 25, 2008, (2008 WL 217796)

Preparing a commercial real estate purchase agreement: the ins and outs for the seller and purchaser, 84 Mich. B.J. 32 (2005 WL 2429684)

The Model Rules of Professional Conduct and the unauthorized practice of law: justification for restricting conveyancing to attorneys, 37 Suffolk U. L. Rev. 169 (2004 WL 3216223)

When time is of the essence.. remedies for breach of contract, 80(1) Law Inst. J. 42 (2006 WL 563944)

Additional References

A. Corbin et al., Corbin on Contracts (rev. ed. 1997)

A. Gaudio, et al., The American Law of Real Property (3d ed. 1994)

E. Farnsworth, Contracts (3d ed. 1999)

J. Calamari & J. Perillo, The Law of Contracts (4th ed. 1998)

J. Murray, Murray on Contracts (3d ed. 1990)

M. Friedman, Contracts and Conveyances of Real Property (6th ed. 1990)

R. Cunningham, W. Stoebuck & D. Whitman, The Law of Property (1984)

R. Powell & P. Rohan, Powell on Real Property (rev. ed. 1997)

[FN*] This article supersedes Time as of the Essence in Real Estate Contract, 13 Am. Jur. Proof of Facts 2d 581.

[FN**] Mark S. Dennison is an attorney in private practice in Westwood, New Jersey, and the author of 16 books and over 150 articles dealing with environmental, land-use, and real property law issues. He is admitted to practice in New Jersey and New York. Some of his more recent books include The Environmental Law and Compliance Handbook, with James F. Berry (McGraw-Hill 2000); Brownfields Redevelopment (Government Institutes 1998); and Wetland Mitigation (Government Institutes 1997). Mr. Dennison holds a B.A., magna cum laude, from the State University of New York (Oswego), M.A. from Syracuse University, and J.D. from New York Law School.

Section 1 Footnotes:[FN1] See § 2.

[FN2] See § 3.

[FN3] See § 4.

[FN4] See §§ 5– 10.

[FN5] See §§ 11– 15.

[FN6] See §§ 16– 17.

[FN7] See § 5.

[FN8] See § 6.

[FN9] See § 7.

[FN10] See § 8.

[FN11] See § 9.

[FN12] See § 10.

[FN13] See §§ 11– 12.

[FN14] See § 13.

[FN15] See §§ 14– 15.

[FN16] See § 18.

[FN17] See §§ 19, 20.

[FN18] See §§ 21– 27.

[FN19] See §§ 28– 45.

[FN20] See §§ 46– 48.

Section 2 Footnotes:[FN1] See §§ 5– 10 for full discussion of contracts with an express provision making time of the essence.

[FN2] See §§ 11– 15 for full discussion of contracts without an express provision making time of the essence.

[FN3] See, for example, Hobgood v. Pennington, 300 S.C. 309, 387 S.E.2d 690, 693 (Ct. App. 1989).See also Am. Jur. 2d, Vendor and Purchaser §§ 85, 86.

[FN4] See, for example, Faulkner v. Millar, 319 S.C. 216, 460 S.E.2d 378, 380 (1995); Hobgood v. Pennington, 300 S.C. 309, 387 S.E.2d 690, 693 (Ct. App. 1989).See also § 12 for discussion of reasonable time allowed to perform where time not made of the essence.

[FN5] Kalinowski v. Yeh, 9 Haw. App. 473, 847 P.2d 673, 677 (1993), quoting 3A A. Corbin, Corbin on Contracts § 716.See also Estate of Schler v. Benson, 947 S.W.2d 495 (Mo. Ct. App. W.D. 1997) (stating that the reason time is not of the essence in contracts for the sale of real estate is that delays are common, the injury caused by delay is minor, and performance at a later time is characterized as substantial performance).

[FN6] See 14 R. Powell & P. Rohan, Powell on Real Property § 881[5] (rev. ed. 1997).

[FN7] See, for example, Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999); Frenzen v. Taylor, 232 Neb. 41, 439 N.W.2d 473 (1989); Menke v. Foote, 199 Neb. 800, 261 N.W.2d 635 (1978).

[FN8] See, for example, Smith v. Potter, 652 N.E.2d 538, 542 (Ind. Ct. App. 1995).

Section 3 Footnotes:[FN1] See, for example, Pittman v. Canham, 2 Cal. App. 4th 556, 3 Cal. Rptr. 2d 340 (2d Dist. 1992); Hobgood v. Pennington, 300 S.C. 309, 387 S.E.2d 690 (Ct. App. 1989).

[FN2] See, for example, Kalinowski v. Yeh, 9 Haw. App. 473, 847 P.2d 673 (1993); Smith v. Potter, 652 N.E.2d 538 (Ind. Ct. App. 1995); Quirk v. Schenk, 34 Mass. App. Ct. 931, 612 N.E.2d 1194 (1993); Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999); Karamatzanis v. Cohen, 181 A.D.2d 618, 581 N.Y.S.2d 339 (1st Dep't 1992); Knight v. McClean, 171 A.D.2d 648, 566 N.Y.S.2d 952 (2d Dep't 1991); Mohen v. Mooney, 162 A.D.2d 664, 557 N.Y.S.2d 108 (2d Dep't 1990); Volynets v. Izzo, 161 A.D.2d 703, 555 N.Y.S.2d 838 (2d Dep't 1990); Greto v. Barker 33 Associates, 161 A.D.2d 109, 554 N.Y.S.2d 546 (1st Dep't 1990); Mid-Town Ltd. Partnership v. Preston, 69 Wash. App. 227, 848 P.2d 1268 (Div. 1 1993); Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981).

[FN3] See, for example, Seabreeze Restaurant, Inc. v. Paumgardhen, 639 So. 2d 69 (Fla. Dist. Ct. App. 2d Dist. 1994); Rybovich Boat Works, Inc. v. Atkins, 587 So. 2d 519 (Fla. Dist. Ct. App. 4th Dist. 1991); Savitsky v. Sukenik, 240 A.D.2d 557, 659 N.Y.S.2d 48 (2d Dep't 1997); Barton v. Lerman, 233 A.D.2d 555, 649 N.Y.S.2d 107 (3d Dep't 1996).

[FN4] See, for example, Harris v. Griffin, 109 Or. App. 253, 818 P.2d 1289 (1991).

[FN5] See, for example, Benalaya v. Campbell, 204 A.D.2d 671, 612 N.Y.S.2d 234 (2d Dep't 1994); Dub v. 47 East 74th Street Corp., 204 A.D.2d 145, 611 N.Y.S.2d 198 (1st Dep't 1994); Squicciarini v. Park Ridge at Terryville Associates, 199 A.D.2d 376, 605 N.Y.S.2d 372 (2d Dep't 1993); Davis v. Northridge Development Associates, 424 Pa. Super. 283, 622 A.2d 381 (1993).

[FN6] See, for example, Separk v. Caswell Builders, Inc., 209 Ga. App. 713, 434 S.E.2d 502 (1993); Stefanelli v. Vitale, 223 A.D.2d 361, 636 N.Y.S.2d 50 (1st Dep't 1996).

[FN7] See §§ 5– 15 for full analysis of facts and circumstances used to determine whether parties intended to make time of the essence, and the effect of such determination.

[FN8] See, for example, Cameron v. Edgemont Inv. Co., 149 Or. 396, 41 P.2d 249 (1935).

[FN9] See, for example, Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981) (holding that purchaser could not waive time of essence clause in contract because it was for the mutual benefit of both parties).

[FN10] See, for example, Williams v. Shamrock Oil & Gas Co., 128 Tex. 146, 95 S.W.2d 1292, 107 A.L.R. 269 (Comm'n App. 1936) (holding that where "time of essence" clause in contract to convey oil and gas leasehold was shown to have reference solely to purchaser, and there was no intention shown that it be applied to sellers of leasehold interest, they could not be held to performance of contract at a fixed time).

Section 4 Footnotes:[FN1] See, for example, Bank of Columbia v. Hagner, 26 U.S. 455, 7, 7 L. Ed. 219 (1828).

[FN2] See, for example, Basler v. Warren, 159 F.2d 41 (C.C.A. 10th Cir. 1947); Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999); Frenzen v. Taylor, 232 Neb. 41, 439 N.W.2d 473 (1989); Loyd v. Southwest Underwriters, 50 N.M. 66, 169 P.2d 238 (1946).

[FN3] See §§ 5– 10 for analysis of contracts with an express provision making time of the essence.

[FN4] See §§ 11– 15 for analysis of contracts without an express provision making time of the essence.

[FN5] See, for example, Kole v. Parker Yale Development Co., 536 P.2d 848 (Colo. Ct. App. 1975); Wimer v. Wagner, 323 Mo. 1156, 20 S.W.2d 650, 79 A.L.R. 1231 (1929); Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999).

[FN6] See, for example, Creasy v. Tincher, 154 W. Va. 18, 173 S.E.2d 332 (1970).

[FN7] See, for example, Katemis v. Westerlind, 142 Cal. App. 2d 799, 299 P.2d 383 (2d Dist. 1956); Johnson v. Schuchardt, 333 Mo. 781, 63 S.W.2d 17, 89 A.L.R. 914 (1933); Wimer v. Wagner, 323 Mo. 1156, 20 S.W.2d 650, 79 A.L.R. 1231 (1929); Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999).See also Am. Jur. 2d, Vendor and Purchaser § 87.

[FN8] See Am. Jur. 2d, Vendor and Purchaser § 87.

[FN9] See § 5 for cases in which the courts adopted this view on admissibility of parol evidence.

[FN10] Donnelly & Suess, Inc. v. Lilley, 393 Pa. 32, 142 A.2d 284 (1958).

Section 5 Footnotes:[FN1] See Am. Jur. 2d, Contracts § 484; Am. Jur. 2d, Vendor and Purchaser § 85.

[FN2] See, for example, Blocker v. Lowry, 285 Ala. 448, 233 So. 2d 233 (1970).

[FN3] See, for example, Seabreeze Restaurant, Inc. v. Paumgardhen, 639 So. 2d 69 (Fla. Dist. Ct. App. 2d Dist. 1994) (where express language of contract made time of the essence with regard to November 30, 1991 closing date, seller had right to refuse purchaser's request for extension and could thereafter, on December 2, demand release of $10,000 escrow deposit because the purchaser failed to close by November 30); Griffeth v. Zumbrennen, 577 P.2d 129 (Utah 1978) (sellers' refusal to grant extension of time for closing of contract, coupled with the purchasers' failure to make the agreed payment on date specified, entitled seller to rescind contract without affording purchaser additional time for performance).

[FN4] Grace v. Nappa, 46 N.Y.2d 560, 415 N.Y.S.2d 793, 389 N.E.2d 107 (1979).

[FN5] See, for example, Garcia v. Alfonso, 490 So. 2d 130 (Fla. Dist. Ct. App. 3d Dist. 1986).

[FN6] See, for example, Kaplan v. Scheiner, 1 A.D.2d 329, 149 N.Y.S.2d 868 (1st Dep't 1956).

[FN7] See, for example, Rybovich Boat Works, Inc. v. Atkins, 587 So. 2d 519 (Fla. Dist. Ct. App. 4th Dist. 1991); Delta Mobile Homes, Inc. v. Ehmann, 275 So. 2d 269 (Fla. Dist. Ct. App. 3d Dist. 1973).

[FN8] See, for example, Lane v. Crescent Beach Lodge & Resort, Inc., 199 N.W.2d 78 (Iowa 1972); Rothenberg v. Follman, 19 Mich. App. 383, 172 N.W.2d 845 (1969); Ring 57 Corp. v. Litt, 28 A.D.2d 548, 280 N.Y.S.2d 330 (2d Dep't 1967); Jakober v. E. M. Loew's Capitol Theatre, Inc., 107 R.I. 104, 265 A.2d 429 (1970).

[FN9] See, for example, University Properties, Inc. v. Moss, 63 Wash. 2d 619, 388 P.2d 543 (1964).

[FN10] See, for example, Friedman v. Winshall, 343 Mich. 647, 73 N.W.2d 248 (1955); Bishop v. Tolbert, 249 S.C. 289, 153 S.E.2d 912 (1967).

[FN11] See, for example, Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981) (fact that extensions of the closing date were for a limited time, coupled with rapid increase in the property's value from $65,000 to $90,000 within a few months when seller received another offer, indicated that time was of the essence).

[FN12] Seabreeze Restaurant, Inc. v. Paumgardhen, 639 So. 2d 69 (Fla. Dist. Ct. App. 2d Dist. 1994) (finding that language of agreement and its incorporation by reference of the letter of intent showed that the parties carried forward into the agreement the time is of the essence clause in the letter of intent).

[FN13] Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981).

Section 6 Footnotes:[FN1] See, for example, Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981) (holding that purchaser could not waive time of essence clause in contract because it was for the mutual benefit of both parties; thus contract expired of its own terms when neither party tendered performance by extended closing date).

[FN2] See, for example, Pittman v. Canham, 2 Cal. App. 4th 556, 3 Cal. Rptr. 2d 340 (2d Dist. 1992) (where contract expressly stated that time was of the essence and neither party tendered performance by close of escrow, neither party could hold the other in default and both parties discharged from performing contract); Smith v. Potter, 652 N.E.2d 538 (Ind. Ct. App. 1995) (where contract expressly stated that time was of the essence, agreement became legally defunct when neither party tendered performance by specified closing date, thus seller's obligation to convey property was extinguished upon purchaser's failure to tender performance by closing date); Nadeau v. Beers, 73 Wash. 2d 608, 440 P.2d 164 (1968) (holding that when an agreement makes time of the essence, fixes a termination date, and there is no conduct giving rise to estoppel or waiver, the agreement becomes legally defunct upon the stated termination date if performance is not tendered); Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981) (where contract expressly stated that time was of the essence, contract expired of its own terms since neither party tendered performance by specified closing date).

See also Pavey v. Collins, 31 Wash. 2d 864, 199 P.2d 571 (1948); Mid-Town Ltd. Partnership v. Preston, 69 Wash. App. 227, 848 P.2d 1268 (Div. 1 1993); Thayer v. Damiano, 9 Wash. App. 207, 511 P.2d 84 (Div. 3 1973).

[FN3] See, for example, Pittman v. Canham, 2 Cal. App. 4th 556, 3 Cal. Rptr. 2d 340 (2d Dist. 1992).

[FN4] See, for example, Pittman v. Canham, 2 Cal. App. 4th 556, 3 Cal. Rptr. 2d 340, 342 (2d Dist. 1992) ("… in a contract with concurrent conditions, the buyer and seller cannot keep saying to one another, 'No, you first.' Ultimately, in such a case, the buyer seeking enforcement comes in second; he loses.").

[FN5] Mid-Town Ltd. Partnership v. Preston, 69 Wash. App. 227, 848 P.2d 1268, 1272-73 (Div. 1 1993).

[FN6] See, for example, Separk v. Caswell Builders, Inc., 209 Ga. App. 713, 434 S.E.2d 502 (1993) (contract not rendered defunct by failure to close by specified date because seller demanded performance by purchaser and purchaser refused to close, seller could bring action for breach of contract).

[FN7] See, for example, Mid-Town Ltd. Partnership v. Preston, 69 Wash. App. 227, 848 P.2d 1268 (Div. 1 1993).See also § 10 for full discussion of the effect of an extension of time on operation of a time of the essence clause.

[FN8] Pittman v. Canham, 2 Cal. App. 4th 556, 3 Cal. Rptr. 2d 340 (2d Dist. 1992).

Section 7 Footnotes:[FN1] See, for example, Pittman v. Canham, 2 Cal. App. 4th 556, 3 Cal. Rptr. 2d 340 (2d Dist. 1992); Smith v. Potter, 652 N.E.2d 538 (Ind. Ct. App. 1995); Nadeau v. Beers, 73 Wash. 2d 608, 440 P.2d 164 (1968); Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981).

[FN2] Kimm v. Andrews, 270 Md. 601, 313 A.2d 466, 472 (1974).See also Kalinowski v. Yeh, 9 Haw. App. 473, 847 P.2d 673 (1993) (sellers could not assert time of essence clause as defense to purchasers' action for specific performance because the purchasers stood ready, willing, and able to perform but the sellers were unable to perform and thus were themselves responsible for delay in closing).

[FN3] See, for example, Kalinowski v. Yeh, 9 Haw. App. 473, 847 P.2d 673, 677 (1993).

[FN4] See, for example, Kalinowski v. Yeh, 9 Haw. App. 473, 847 P.2d 673, 677 (1993).

[FN5] See, for example, Burke Aviation Corp. v. Alton Jennings Co., 1962 OK 217, 377 P.2d 578 (Okla. 1962); Alk v. Lanini, 61 Or. App. 158, 656 P.2d 367 (1982); Egbert v. Way, 15 Wash. App. 76, 546 P.2d 1246 (Div. 3 1976); Hudesman v. Foley, 4 Wash. App. 230, 480 P.2d 534 (Div. 1 1971).See also Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139,

632 P.2d 911 (Div. 3 1981) (finding that seller did not act in bad faith with regard to fulfillment of condition precedent of providing marketable title and thus failure to meet closing date was not caused by seller's lack of diligence).

[FN6] See, for example, Kimm v. Andrews, 270 Md. 601, 313 A.2d 466, 472 (1974); NGA #2 Ltd. Liability Co. v. Rains, 113 Nev. 1151, 946 P.2d 163 (1997).

[FN7] See, for example, NGA #2 Ltd. Liability Co. v. Rains, 113 Nev. 1151, 946 P.2d 163 (1997) (genuine issue of fact remained as to whether purchaser would have been able to perform but for delays allegedly caused by conduct of seller); Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981) (finding that seller did not act in bad faith with regard to fulfillment of condition precedent of providing marketable title and thus failure to meet closing date was not caused by seller's lack of diligence).

[FN8] Alk v. Lanini, 61 Or. App. 158, 656 P.2d 367 (1982).

[FN9] Alk v. Lanini, 61 Or. App. 158, 656 P.2d 367, 369 (1982) (citations omitted).

Section 8 Footnotes:[FN1] See Am. Jur. 2d, Vendor and Purchaser §§ 91, 92.

[FN2] See, for example, Medical Services Group, Inc. v. Boise Lodge No. 310, Benev. and Protective Order of Elks, 126 Idaho 90, 878 P.2d 789, 793 (Ct. App. 1994).

[FN3] See, for example, Barker v. Leonard, 263 Ill. App. 3d 661, 200 Ill. Dec. 507, 635 N.E.2d 846, 848 (1st Dist. 1994).

[FN4] See Am. Jur. 2d, Vendor and Purchaser §§ 91, 92.

[FN5] See, for example, Rybovich Boat Works, Inc. v. Atkins, 587 So. 2d 519 (Fla. Dist. Ct. App. 4th Dist. 1991) (even though seller agreed to extend closing date nine times, seller did not waive time of essence provision in light of anti-waiver provision which required that any waiver of rights be in writing; thus, seller could hold purchaser in default when purchaser failed to tender performance by latest closing date).

[FN6] See, for example, English v. Muller, 270 Ga. 876, 514 S.E.2d 194 (1999); Barker v. Leonard, 263 Ill. App. 3d 661, 200 Ill. Dec. 507, 635 N.E.2d 846, 848 (1st Dist. 1994); Williams v. Ubaldo, 670 A.2d 913, 916 (Me. 1996); Shaeffer v. Kelton, 95 N.M. 182, 619 P.2d 1226, 1230 (1980).

[FN7] See, for example, Medical Services Group, Inc. v. Boise Lodge No. 310, Benev. and Protective Order of Elks, 126 Idaho 90, 878 P.2d 789, 793 (Ct. App. 1994) ("Waiver will not be inferred except from a clear and unequivocal act manifesting an intent to waive.").See also Am. Jur. 2d, Estoppel and Waiver §§ 154, 158.

[FN8] See, for example, English v. Muller, 270 Ga. 876, 514 S.E.2d 194 (1999); Barnes v. Brown, 193 Ill. App. 3d 604, 140 Ill. Dec. 552, 550 N.E.2d 34 (2d Dist. 1990); Wysocki v. Bedrosian, 124 Ill. App. 3d 158, 79 Ill. Dec. 564, 463 N.E.2d 1339 (2d Dist. 1984).

[FN9] Warner Co. v. MacMullen, 381 Pa. 22, 112 A.2d 74, 78 (1955) (where the parties had treated the land sales contract as in force after the expiration of the time specified for settlement, such settlement time became indefinite and the sellers could not terminate the agreement without reasonable notice to the purchaser).See also Davis v. Northridge Development Associates, 424 Pa. Super. 283, 622 A.2d 381, 385 (1993) (conduct of parties did not show mutual intent to waive or extend closing date).

[FN10] See, for example, Endres v. Warriner, 307 N.W.2d 146 (S.D. 1981) (purchaser entitled to specific performance where sellers had waived time for payment, had given no notice of any withdrawal of the waiver, and had not given purchaser a reasonable time to complete the contract).See also Am. Jur. 2d, Vendor and Purchaser §§ 92, 93.

[FN11] See § 9 for full discussion of restoration of time of essence clause following prior waiver.

[FN12] See Circumstances Establishing Waiver of Strict Compliance with Terms of Real Estate Contract, 60 Am. Jur. Proof of Facts 3d 445.

[FN13] See, for example, Baker v. Norman, 226 A.D.2d 301, 643 N.Y.S.2d 30 (1st Dep't 1996); Johnson v. Feskens, 146 Or. 657, 31 P.2d 667, 107 A.L.R. 340 (1934).

[FN14] See, for example, Smith v. Christofalos, 74 Ill. App. 3d 204, 30 Ill. Dec. 101, 392 N.E.2d 756 (2d Dist. 1979) (evidence of a seller's waiver of a time of essence clause may be established by a course of conduct which indicates to the buyer that the seller is not relying on the clause); Greto v. Barker 33 Associates, 161 A.D.2d 109, 554 N.Y.S.2d 546 (1st Dep't 1990) (evidence failed to establish seller's waiver of time of essence clause).

[FN15] See, for example, English v. Muller, 270 Ga. 876, 514 S.E.2d 194 (1999).

[FN16] Bolton v. Barber, 233 Ga. 646, 212 S.E.2d 766 (1975).

[FN17] See, for example, Donnelly & Suess, Inc. v. Lilley, 393 Pa. 32, 142 A.2d 284 (1958); Glover v. Grubbs, 367 Pa. 257, 80 A.2d 75 (1951); Davis v. Northridge Development Associates, 424 Pa. Super. 283, 622 A.2d 381 (1993).

[FN18] English v. Muller, 270 Ga. 876, 514 S.E.2d 194 (1999).

[FN19] Endres v. Warriner, 307 N.W.2d 146 (S.D. 1981).

Section 9 Footnotes:[FN1] See, for example, Ridge Chevrolet-Oldsmobile, Inc. v. Scarano, 238 N.J. Super. 149, 569 A.2d 296, 300 (App. Div. 1990); Boehnlein v. Ansco, Inc., 61 Or. App. 389, 657 P.2d 702 (1983).

[FN2] See, for example, Boehnlein v. Ansco, Inc., 61 Or. App. 389, 657 P.2d 702 (1983) (seller's notice, requiring performance within five days, gave purchaser reasonable time to perform).

[FN3] See, for example, Chan v. Title Ins. & Trust Co., 39 Cal. 2d 253, 246 P.2d 632 (1952) (seller failed to give purchaser definite notice to perform after an initial waiver of time of essence clause).

[FN4] See, for example, Harris v. Griffin, 109 Or. App. 253, 818 P.2d 1289 (1991) (finding that even if seller's acceptance of late payments in past had the effect of waiving the time of the essence provision in the installment contract, the purchaser's timely payment over the 14-year period preceding the breach had the effect of reinstating it; thus, there was no pattern of accepting late payments at the relevant time and the seller was not required to send a notice of reinstatement to induce the purchasers to do what they were already doing).

[FN5] See, for example, Legg v. Allen, 72 Or. App. 351, 696 P.2d 9 (1985).

[FN6] See, for example, Kirkpatrick v. Petreikis, 44 Ill. App. 3d 575, 3 Ill. Dec. 281, 358 N.E.2d 679 (3d Dist. 1976) (30-day warning of seller's intention to declare forfeiture considered reasonable).

[FN7] Boehnlein v. Ansco, Inc., 61 Or. App. 389, 657 P.2d 702 (1983).

Section 10 Footnotes:[FN1] See, for example, Quirk v. Schenk, 34 Mass. App. Ct. 931, 612 N.E.2d 1194 (1993) (sellers equitably estopped from asserting time of essence clause in contract based on evidence that prior extensions were granted to accommodate seller and purchaser made substantial payment toward purchase price prior to his failure to show up at scheduled closing).

[FN2] See, for example, Miami Child's World, Inc. v. City of Miami Beach, 688 So. 2d 942 (Fla. Dist. Ct. App. 3d Dist. 1997) (seller did not waive time of essence clause by granting repeated extensions of closing date to purchaser).

[FN3] Davis v. Northridge Development Associates, 424 Pa. Super. 283, 622 A.2d 381, 385 (1993), quoting Wasserman v. Steinman, 304 Pa. 150, 155 A. 302, 303 (1931).

[FN4] See, for example, Rybovich Boat Works, Inc. v. Atkins, 587 So. 2d 519 (Fla. Dist. Ct. App. 4th Dist. 1991) (even though seller agreed to extend closing date nine times, seller could invoke time of essence provision to hold purchaser in default when purchaser failed to tender performance by latest closing date); Ray v. Peeples, 387 So. 2d 1303 (La. Ct. App. 1st Cir. 1980) (where time was of the essence of the agreement and, impliedly, of the extension thereof, it was not necessary for sellers to make a formal notice putting purchasers in default when they did not close within extended time period); Mid-Town Ltd. Partnership v. Preston, 69 Wash. App. 227, 848 P.2d 1268 (Div. 1 1993) (where the parties agree to extend the closing date in the contract and neither party tenders performance by the extended closing date); Local 112, I. B. E. W. Bldg. Ass'n v. Tomlinson Dari-Mart, Inc., 30 Wash. App. 139, 632 P.2d 911 (Div. 3 1981) (where contract contained time of essence clause and specified closing date of May 31, 1978, and parties executed amendment to extend closing date to "not later than July 31, 1978" and seller refused to agree to another extension to August 31, 1978, agreement expired of its own terms when neither party tendered performance by July 31, 1978).

Section 11 Footnotes:

[FN1] See § 2 for discussion of general rules regarding time of the essence.

[FN2] See, for example, Dowling v. Pierre Gohill America Corp., 209 A.D.2d 774, 617 N.Y.S.2d 992 (3d Dep't 1994).

[FN3] See, for example, Bogojavlensky v. Logan, 181 Pa. Super. 312, 124 A.2d 412 (1956).

[FN4] See, for example, Squicciarini v. Park Ridge at Terryville Associates, 199 A.D.2d 376, 605 N.Y.S.2d 372 (2d Dep't 1993) (no express provision making time of essence but court found that language of contract clearly implied that time was of essence).

[FN5] See, for example, Hobgood v. Pennington, 300 S.C. 309, 387 S.E.2d 690 (Ct. App. 1989).See also Am. Jur. 2d, Vendor and Purchaser § 86.

[FN6] Some courts espouse the view that time cannot be considered of the essence of a land sales contract absent language voiding the contract after a certain period of time. Padgett v. Bryant, 121 Ga. App. 807, 175 S.E.2d 884 (1970) (contract required 90 days to close sale, but no language voided contract after 90 days).

[FN7] See, for example, Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999); Johnson v. Schuchardt, 333 Mo. 781, 63 S.W.2d 17, 89 A.L.R. 914 (1933); Wimer v. Wagner, 323 Mo. 1156, 20 S.W.2d 650, 79 A.L.R. 1231 (1929).

[FN8] See, for example, Twin Towers Development, Inc. v. Butternut Apartments, L.P., 257 Neb. 511, 599 N.W.2d 839 (1999) (contract set forth the condition that the closing occur "in no event after July 20, 1997" and provided that the agreement "shall expire on July 20, 1997, and Purchaser's right to purchase the Property herein described shall terminate at 5:00 p.m. on that date."); Dodge v. Galusha, 151 Neb. 753, 39 N.W.2d 539 (1949) (contract specified that upon payment of a certain sum on a certain day, seller would convey title); English Speaking Union (New York), Inc. v. Payson, 11 Misc. 2d 669, 174 N.Y.S.2d 775 (Sup 1958), judgment aff'd, 6 A.D.2d 1031, 178 N.Y.S.2d 1015 (1st Dep't 1958) (stipulation adjourning the closing date of real estate contract from one specific date to another held to plainly make time of the essence, and seller's refusal to agree to any further adjournments gave the purchaser unmistakable notice that he must perform); Creasy v. Tincher, 154 W. Va. 18, 173 S.E.2d 332 (1970) (contract provided that the sale of land should be completed within 90 days from date of acceptance by sellers, no provision was made for notice or demand for compliance, sellers had reluctantly agreed to the long time period, and the purchaser had requested an extension, which was denied).

[FN9] Gonis v. New York Life Ins. Co., 70 Wis. 2d 950, 236 N.W.2d 273 (1975).

Section 12 Footnotes:[FN1] See, for example, Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989); Zev v. Merman, 134 A.D.2d 555, 521 N.Y.S.2d 455 (2d Dep't 1987), appeal granted, 72 N.Y.2d 802, 530 N.Y.S.2d 554, 526 N.E.2d 45 (1988) and order aff'd, 73 N.Y.2d 781, 536 N.Y.S.2d 739, 533 N.E.2d 669 (1988).

[FN2] See, for example, Limpus v. Armstrong, 3 Mass. App. Ct. 19, 322 N.E.2d 187 (1975); Leavitt v. Fowler, 118 N.H. 541, 391 A.2d 876 (1978); Savitsky v. Sukenik, 240 A.D.2d 557, 659 N.Y.S.2d 48 (2d Dep't 1997).

[FN3] See, for example, Scull v. Sicoli, 247 A.D.2d 852, 668 N.Y.S.2d 827 (4th Dep't 1998); Glover v. Grubbs, 367 Pa. 257, 80 A.2d 75, 76 (1951).

[FN4] Com. v. Pendleton, 480 Pa. 107, 389 A.2d 532, 535 (1978).

[FN5] See, for example, Savitsky v. Sukenik, 240 A.D.2d 557, 659 N.Y.S.2d 48 (2d Dep't 1997); Zev v. Merman, 134 A.D.2d 555, 521 N.Y.S.2d 455 (2d Dep't 1987), appeal granted, 72 N.Y.2d 802, 530 N.Y.S.2d 554, 526 N.E.2d 45 (1988) and order aff'd, 73 N.Y.2d 781, 536 N.Y.S.2d 739, 533 N.E.2d 669 (1988); Reagan v. D. & D. Builders, Inc., 277 Pa. Super. 140, 419 A.2d 700, 702 (1980).

Section 13 Footnotes:[FN1] See, for example, Ridge Chevrolet-Oldsmobile, Inc. v. Scarano, 238 N.J. Super. 149, 569 A.2d 296 (App. Div. 1990).

[FN2] See, for example, Young v. Brookshire Village Properties, 101 Ohio App. 3d 458, 655 N.E.2d 1329 (12th Dist. Warren County 1995) (finding that seller did not waive closing date by proposing amendment to contract to extend date where purchaser never signed amendment, thus barring purchaser's action for breach of contract).

[FN3] See, for example, English v. Muller, 270 Ga. 876, 514 S.E.2d 194, 195 (1999) (seller may waive the purchaser's obligation to tender timely performance by avoiding all contact with the purchasers).

[FN4] See § 14 for discussion of rules regarding subsequent notice making time of essence.

[FN5] See, for example, Scull v. Sicoli, 247 A.D.2d 852, 668 N.Y.S.2d 827 (4th Dep't 1998).See also Stefanelli v. Vitale, 223 A.D.2d 361, 636 N.Y.S.2d 50 (1st Dep't 1996) (court ruled that after sellers gave notice to purchasers making time of essence with respect to closing date, purchasers waived time of essence by indicating continued willingness to close after closing date had passed; thus, purchaser held in breach of contract for refusing to close when sellers stood ready, willing, and able to close less than month after closing date had passed, entitling sellers to retain purchasers' down payment); Helsley v. Anderson, 519 S.W.2d 130 (Tex. Civ. App. Dallas 1975) (finding that both parties had indicated an interest and intention to complete transaction after the originally specified closing date had passed, court held that since time was not of the essence, the contract continued in effect so long as the seller had made no tender or demand on the purchaser).

[FN6] Cantrell v. Kruck, 25 Ill. App. 3d 1060, 324 N.E.2d 260 (2d Dist. 1975).

[FN7] Hockenbury v. Lorentz, 35 Ill. App. 3d 983, 343 N.E.2d 90 (3d Dist. 1976).


[FN9] See, for example, Moore v. Lovelace, 413 So. 2d 1100 (Ala. 1982); Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989); English Speaking Union (New York), Inc. v. Payson, 11 Misc. 2d 669, 174 N.Y.S.2d 775 (Sup 1958), judgment aff'd, 6 A.D.2d 1031, 178 N.Y.S.2d 1015 (1st Dep't 1958); Gonis v. New York Life Ins. Co., 70 Wis. 2d 950, 236 N.W.2d 273 (1975).

[FN10] See, for example, Creasy v. Tincher, 154 W. Va. 18, 173 S.E.2d 332 (1970).

Section 14 Footnotes:[FN1] See, for example, Earlin v. Mors, 1 N.J. 336, 63 A.2d 531 (1949) (overruled on other grounds by, Kutzin v. Pirnie, 124 N.J. 500, 591 A.2d 932 (1991)) (where vendor notified purchaser two weeks prior to settlement date that such date would be adhered to and requested purchaser to appear and close title at broker's office; time was thereby made of the essence of the contract, and purchaser could not subsequently, upon rescission, recover his deposit and other costs even though vendor's title later proved to be defective).

[FN2] See Am. Jur. 2d, Vendor and Purchaser §§ 89, 90.

[FN3] See, for example, Savitsky v. Sukenik, 240 A.D.2d 557, 659 N.Y.S.2d 48 (2d Dep't 1997); Barton v. Lerman, 233 A.D.2d 555, 649 N.Y.S.2d 107 (3d Dep't 1996); Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989).See also § 15 for full discussion of reasonableness of period of time for performance.

[FN4] See, for example, Benalaya v. Campbell, 204 A.D.2d 671, 612 N.Y.S.2d 234 (2d Dep't 1994) (purchasers' letter to seller did not constitute a clear and unequivocal notice making time of the essence because it did not set a final closing date, nor give the seller a reasonable time to perform); Karamatzanis v. Cohen, 181 A.D.2d 618, 581 N.Y.S.2d 339 (1st Dep't 1992) (notice sent by seller's counsel to buyer's counsel stating that seller would not consent to adjourn closing beyond fixed date for any reason, but which failed to contain clear and unequivocal warning that failure to close by that date would be considered default, was insufficient to render time of the essence); Knight v. McClean, 171 A.D.2d 648, 566 N.Y.S.2d 952 (2d Dep't 1991) (letter from seller's attorney making time of essence was clear and unequivocal but did not give purchasers reasonable time to perform under the circumstances); Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989) (communications from seller's attorney advising purchaser that seller was granting a "final adjournment of closing until June 6, 1985" and threatening to hold purchaser in default converted the contract into one in which time was of the essence); Palmiotto v. Mark, 145 A.D.2d 549, 536 N.Y.S.2d 101 (2d Dep't 1988) (seller converted agreement to one in which time was of essence by letter, sent after original closing date had passed, advising purchaser in clear and unequivocal language that closing by specific date was of essence and that seller would consider contract terminated if closing date passed); Davis v. Cordell, 237 S.C. 88, 115 S.E.2d 649 (1960) (although not expressly finding that seller had waived an original reasonable time for performance, court held that where the purchaser had made no payment during the eight months following formation of the contract, the seller nevertheless could not rescind without an unequivocal notice to the purchaser of her intention to do so which allowed a reasonable time for the purchaser to perform).

[FN5] See, for example, Karamatzanis v. Cohen, 181 A.D.2d 618, 581 N.Y.S.2d 339 (1st Dep't 1992); Mohen v. Mooney, 162 A.D.2d 664, 557 N.Y.S.2d 108 (2d Dep't 1990); Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989).

[FN6] See, for example, Pease v. Brown, 186 Cal. App. 2d 425, 8 Cal. Rptr. 917 (2d Dist. 1960) (holding that where there had been a waiver of the closing time by the seller, the seller must, in order to put the purchasers in default, give notice and allow them a reasonable time within which to perform); Drazin v. American Oil Co., 395 A.2d 32 (D.C. 1978) (explaining that reasonableness must depend on the circumstances of each case, and that the time given must bear some reasonable relationship to the time which has already elapsed); Tanner v. Baadsgaard, 612 P.2d 345 (Utah 1980) (after seller's waiver of strict compliance with the payment date stated in land sales contract, seller had to give notice and a reasonable time to perform before he could insist on holding the purchaser strictly to any time requirements).

[FN7] See § 12 for discussion of the rule allowing a reasonable time to perform where time not made of the essence.

[FN8] See, for example, Miller v. Almquist, 241 A.D.2d 181, 671 N.Y.S.2d 746 (1st Dep't 1998); 3M Holding Corp. v. Wagner, 166 A.D.2d 580, 560 N.Y.S.2d 865 (2d Dep't 1990); Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989).

[FN9] See, for example, Miller v. Almquist, 241 A.D.2d 181, 671 N.Y.S.2d 746 (1st Dep't 1998); Wimer v. Wagner, 323 Mo. 1156, 20 S.W.2d 650, 79 A.L.R. 1231 (1929).

[FN10] See, for example, Miller v. Almquist, 241 A.D.2d 181, 671 N.Y.S.2d 746 (1st Dep't 1998) (seller's notice making time of essence was clear and unequivocal but did not afford purchaser reasonable amount of time to perform).See also Knight v. McClean, 171 A.D.2d 648, 566 N.Y.S.2d 952 (2d Dep't 1991); Zev v. Merman, 134 A.D.2d 555, 521 N.Y.S.2d 455 (2d Dep't 1987), appeal granted, 72 N.Y.2d 802, 530 N.Y.S.2d 554, 526 N.E.2d 45 (1988) and order aff'd, 73 N.Y.2d 781, 536 N.Y.S.2d 739, 533 N.E.2d 669 (1988).

[FN11] See, for example, Charchan v. Wilkins, 231 A.D.2d 668, 647 N.Y.S.2d 550 (2d Dep't 1996); Liba Estates, Inc. v. Edryn Corp., 178 A.D.2d 152, 577 N.Y.S.2d 19 (1st Dep't 1991); Knight v. McClean, 171 A.D.2d 648, 566 N.Y.S.2d 952 (2d Dep't 1991); Mohen v. Mooney, 162 A.D.2d 664, 557 N.Y.S.2d 108 (2d Dep't 1990).

[FN12] See, for example, Stefanelli v. Vitale, 223 A.D.2d 361, 636 N.Y.S.2d 50 (1st Dep't 1996); Dub v. 47 East 74th Street Corp., 204 A.D.2d 145, 611 N.Y.S.2d 198 (1st Dep't 1994).

[FN13] See, for example, Bell v. Yale Development Co., 102 Ill. App. 3d 108, 57 Ill. Dec. 777, 429 N.E.2d 894, 32 A.L.R.4th 1 (3d Dist. 1981) (where original contract contemplated closing within 5 months but it had not been closed for nearly 6 years, seller's notice giving purchaser 30 days to close was both sufficient and provided reasonable time to perform, so that it was effective to constitute rescission of the contract when the purchaser did not so perform); Volynets v. Izzo, 161 A.D.2d 703, 555 N.Y.S.2d 838 (2d Dep't 1990) (letter from seller made time of essence; purchaser not entitled to specific performance because he failed to tender performance on date specified in notice); Xhelili v. Larstanna, 150 A.D.2d 560, 541 N.Y.S.2d

132 (2d Dep't 1989) (purchasers were not entitled to specific performance of land sales contract where sellers, by letter of their attorney, extended for fourth time period within which purchasers could obtain mortgage commitment, letter gave clear notice that time was of essence in performance of contract, and purchasers failed to show that they were ready, willing and able to close on date specified in letter).

[FN14] See, for example, Dub v. 47 East 74th Street Corp., 204 A.D.2d 145, 611 N.Y.S.2d 198 (1st Dep't 1994) (seller sent notice making time of essence, but since he was himself in default by failing to tender performance of his obligations on closing date, purchaser could declare seller in default and demand return of contract deposit).

[FN15] Moore v. Lovelace, 413 So. 2d 1100 (Ala. 1982).

[FN16] Benalaya v. Campbell, 204 A.D.2d 671, 612 N.Y.S.2d 234 (2d Dep't 1994).

Section 15 Footnotes:[FN1] Drazin v. American Oil Co., 395 A.2d 32 (D.C. 1978).

[FN2] Sohayegh v. Oberlander, 155 A.D.2d 436, 547 N.Y.S.2d 98 (2d Dep't 1989).

[FN3] Bishop v. Tolbert, 249 S.C. 289, 153 S.E.2d 912 (1967).

Section 16 Footnotes:[FN1] See Am. Jur. 2d, Vendor and Purchaser § 84.


[FN3] TST, Ltd., Inc. v. Houston, 256 Ga. 679, 353 S.E.2d 26, 27 (1987).

[FN4] See Optionee's Timely Exercise of Option to Purchase Realty, 60 Am. Jur. Proof of Facts 3d 255.

[FN5] See, for example, Cummings v. Bullock, 367 F.2d 182 (9th Cir. 1966) (applying California law); Russell v. Hill, 237 Ark. 712, 375 S.W.2d 661 (1964); Estate of Schler v. Benson, 947 S.W.2d 495 (Mo. Ct. App. W.D. 1997); Catawba Athletics, Inc. v. Newton Car Wash, Inc., 53 N.C. App. 708, 281 S.E.2d 676 (1981); Conrad Milwaukee Corp. v. Wasilewski, 30 Wis. 2d 481, 141 N.W.2d 240 (1966).

[FN6] Jackson v. L.D. McReynolds, Inc., 430 So. 2d 873 (Ala. 1983).

[FN7] See, for example, Venture Stores, Inc. v. Pacific Beach Co. Inc., 980 S.W.2d 176 (Mo. Ct. App. W.D. 1998).

[FN8] See, for example, Broach v. City of Hampton, 283 Ark. 496, 677 S.W.2d 851 (1984); Oliver v. Wyatt, 418 S.W.2d 403 (Ky. 1967); Venture Stores, Inc. v. Pacific Beach Co. Inc., 980 S.W.2d 176 (Mo. Ct. App. W.D. 1998); Mohr Park Manor, Inc. v. Mohr, 83 Nev. 107, 424 P.2d 101, 31 A.L.R.3d 513 (1967); Wall v. Huguenin, 305 S.C. 100, 406 S.E.2d 347 (1991); Coulter & Smith, Ltd. v. Russell, 966 P.2d 852 (Utah 1998).

[FN9] See Optionee's Timely Exercise of Option to Purchase Realty, 60 Am. Jur. Proof of Facts 3d 255.

[FN10] See, for example, Paul's Rod & Bearing, Ltd. v. Kelly, 847 S.W.2d 68, 73 (Mo. Ct. App. W.D. 1991).

[FN11] See, for example, Nahn v. Soffer, 824 S.W.2d 442, 444 (Mo. Ct. App. E.D. 1991).

[FN12] See, for example, Nahn v. Soffer, 824 S.W.2d 442 (Mo. Ct. App. E.D. 1991) (holding that where an option contract for the sale of land did not contain a closing date, it was an implied requirement that the closing must be within a reasonable time).See also Estate of Schler v. Benson, 947 S.W.2d 495 (Mo. Ct. App. W.D. 1997); 2M Realty Corp. v. Boehm, 204 A.D.2d 620, 612 N.Y.S.2d 207 (2d Dep't 1994); Ingram v. Kasey's Associates, 328 S.C. 399, 493 S.E.2d 856 (Ct. App. 1997), cert. granted, (Dec. 17, 1998) and rev'd on other grounds, 340 S.C. 98, 531 S.E.2d 287 (2000).

Section 17 Footnotes:[FN1] See, for example, Broach v. City of Hampton, 283 Ark. 496, 677 S.W.2d 851 (1984).See also Am. Jur. 2d, Vendor and Purchaser § 39.

[FN2] See, for example, Wulfenstein v. Larson, 527 P.2d 650 (Utah 1974).

[FN3] See, for example, Real Bidder L.L.C. v. St. Luke's-Roosevelt Hospital Center, 254 A.D.2d 123, 678 N.Y.S.2d 630 (1st Dep't 1998) (purchaser's exercise of its right of first refusal to purchase commercial condominium unit was timely, coming as it did within 30 days of purchaser's final receipt of information it had requested from vendor, which information was relevant to purchaser's decision as to whether to purchase unit).

[FN4] See, for example, Jackson v. L.D. McReynolds, Inc., 430 So. 2d 873 (Ala. 1983) (finding that optionee did not fail to exercise option on time where optionee's inability to tender agreed upon purchase price was due to bank's refusal to make loan because of outstanding lien on property); Lee v. Thunder Development, Inc., 77 Or. App. 7, 711 P.2d 978 (1985) (optionee excused from giving written notice of exercise of option where optionor unable to deliver marketable title in accordance with terms of contract).

[FN5] See, for example, Ritchie v. Cordray, 10 Ohio App. 3d 213, 461 N.E.2d 325 (10th Dist. Franklin County 1983) (where optionors received optionee's acceptance on business day following expiration of option period but were still willing to sell land to him and in fact attempted to have sale consummated, strict compliance with terms of acceptance was waived).See also Am. Jur. 2d, Vendor and Purchaser § 50.

[FN6] See, for example, Jordan v. Flynt, 240 Ga. 359, 240 S.E.2d 858 (1977).

[FN7] Compare TST, Ltd., Inc. v. Houston, 256 Ga. 679, 353 S.E.2d 26 (1987) (optionor did not waive right to insist upon five days' written notice of closing, as provided for in option contract, by allegedly declining to talk to optionee when optionee orally requested closing; mere silence of optionor did not alter optionee's obligation, or its ability, to comply with the unambiguous requirement for written notice) with Charles Hyman, Inc. v. Power Cooling, Inc., 106 A.D.2d

423, 482 N.Y.S.2d 516 (2d Dep't 1984) (holder of option to purchase properly and timely exercised option by requesting that optionor contact it to discuss implementation of option, notwithstanding that optionor did not respond to that request and did not return option holder's subsequent telephone calls; conduct of vendor evinced acquiescence to indefinite delay of closing of title).


[FN9] See, for example, Catawba Athletics, Inc. v. Newton Car Wash, Inc., 53 N.C. App. 708, 281 S.E.2d 676 (1981).But see Lee v. Thunder Development, Inc., 77 Or. App. 7, 711 P.2d 978 (1985) (notwithstanding that optionee never gave written notice of exercise of option, optionee was entitled to restitution of amount paid for option where optionor had clearly repudiated contract by his inability to perform in accordance with its terms).

Section 18 Footnotes:[FN1] See § 3.

[FN2] See §§ 2, 5.

[FN3] See § 4.

[FN4] See § 6.

[FN5] See § 7.

[FN6] See § 8.

[FN7] See § 9.

[FN8] See § 10.

[FN9] See §§ 2, 11, 21– 27.

[FN10] See § 4.

[FN11] See § 12.

[FN12] See § 13.

[FN13] See §§ 14, 15, 28– 45.

[FN14] See § 16.

[FN15] See § 17.

[FN1] Fed. R. Civ. Proc. 43(b).

[FN2] Am. Jur. 2d, Witnesses § 731.

[FN3] See Am. Jur. 2d, Witnesses §§ 422, 423, 494.

[FN4] As to the scope of cross-examination of a party who has been called as an adverse witness by the opposing party, see Am. Jur. 2d, Witnesses § 833.

Section 46 Footnotes:[FN1] The trial court's use of this jury instruction was approved in Separk v. Caswell Builders, Inc., 209 Ga. App. 713, 434 S.E.2d 502, 504 (1993).



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