"Time is of the Essence"
August 20, 2012
" Time is of the Essence" is a phrase found in the California Association of Realtors contracts. Some folks think it means that it is important to complete the contractural agreements as quickly as possible. Such an interpretation is not quite correct. The phrase "Time is of the essence" in contracts is a legal phrase which carries with it the obligation of the parties to the agreement to complete any actions described in the contract in the amount of time that the contract states. Since sometimes the time frames were left blank, the C.A.R. contracts have preprinted default times. These contracts do allow for these preprinted time frames to be extended or shortened to suit particular situations. However, once a contract is fully signed by the contracting parties, it is important to fulfill the actions referred to in the stated time. If a party fails to meet the time frames, the other party has actions that can be taken to cancel the agreement.
In the past several years, when the market had so few buyers, sellers were inclined to let some time frames slide. We are seeing that sellers are now wanting buyer to perform as stated in the agreement. With multiple offers and sometimes another buyer waiting in the wings, understanding the phrase "Time is of the essence" becomes important.
Legally, however, the parties to the contract must allow a "reasonable" amount of time for an action to be performed. It is always preferable to have the "reasonable" time printed in the contract. To state no time frame allows "reasonable" to be interpreted and one partiy's interpretation may differ from another.
When writing contracts, clarity is always important so that all parties are clear about their obligations.
" Time is of the Essence" is a phrase found in the California Association of Realtors contracts. Some folks think it means that it is important to complete the contractural agreements as quickly as possible. Such an interpretation is not quite correct. The phrase "Time is of the essence" in contracts is a legal phrase which carries with it the obligation of the parties to the agreement to complete any actions described in the contract in the amount of time that the contract states. Since sometimes the time frames were left blank, the C.A.R. contracts have preprinted default times. These contracts do allow for these preprinted time frames to be extended or shortened to suit particular situations. However, once a contract is fully signed by the contracting parties, it is important to fulfill the actions referred to in the stated time. If a party fails to meet the time frames, the other party has actions that can be taken to cancel the agreement.
In the past several years, when the market had so few buyers, sellers were inclined to let some time frames slide. We are seeing that sellers are now wanting buyer to perform as stated in the agreement. With multiple offers and sometimes another buyer waiting in the wings, understanding the phrase "Time is of the essence" becomes important.
Legally, however, the parties to the contract must allow a "reasonable" amount of time for an action to be performed. It is always preferable to have the "reasonable" time printed in the contract. To state no time frame allows "reasonable" to be interpreted and one partiy's interpretation may differ from another.
When writing contracts, clarity is always important so that all parties are clear about their obligations.
posted by shirley harry at 8:15 AM
0 Comments:
Post a Comment
<< Home