ContractsIntermediateArizona Exam

Under Arizona contract law, 'time is of the essence' means:

AAll deadlines are suggestions and can be extended informally
BParties must perform contractual obligations on or before the stated deadlinesCorrect
CThe transaction must close within 30 days of the contract date
DBoth parties can extend any deadline by verbal agreement

Why Parties must perform contractual obligations on or before the stated deadlines Is Correct

Answer B: Parties must perform contractual obligations on or before the stated deadlines

When a contract states time is of the essence, each party must strictly meet all deadlines. Failure to perform by a deadline can constitute a breach, allowing the other party to cancel the contract.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

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