Beat the Clock: When Time is of the Essence
Unless specified otherwise, time is NOT of the essence in real estate contracts. But what does it mean when it is?
The Free Dictionary says "A phrase in a contract that means that performance by one party at or within the period specified in the contract is necessary to enable that party to require performance by the other party. Failure to act within the time required constitutes a breach of the contract." And "the specified time and dates in this agreement are vital and thus, mandatory, and 'we mean it.' Therefore, any delay, reasonable or not, slight or not, will be grounds for cancelling the agreement."
In Texas, one of the "time is of the essence" performance requirements is in the Termination Option paragraph. The promulgated 1-4 family residential resale contract form even has these words in bold: "Time is of the essence for this paragraph and strict compliance with this time for performance is required." In other words, we really, really mean it!
Recently, the agent on the other side of a transaction wanted the option period to end on a particular day at 5:00 PM. Usually, the field he was using would contain a number of days beyond the execution date of the contract. And the day ends at 11:59 PM.
In order to Beat The Clock to 1) preserve my client's right to terminate the contract at any time within the option period and/or 2) get the repair amendment signed off, I had to readjust my thinking. I was going to have 6 hours less than normal.
The texting, phone calls and emails were fast and furious. The listing agent was not in the office and was relying on his staff to handle getting the amendment written and signed by the seller. Then I had to get the buyer to sign off. And I had to execute the amendment and communicate to the listing agent that it was done.
We got it all done with just a few minutes to spare. My heart was racing and I was exhausted!
Enjoy this clip of the original Beat The Clock with Bud Collyer.