Contracts
What is the purpose of a 'time is of the essence' clause in a Hawaii real estate contract?
AA. It requires the transaction to close before the listing expires
BB. It makes all deadlines in the contract strictly enforceable, so missing a deadline can constitute breach✓ Correct
CC. It gives the seller the right to accept other offers while the current offer is pending
DD. It accelerates the loan if payments are late
Explanation
A 'time is of the essence' clause makes all contractual deadlines strictly binding. Missing a deadline (such as the inspection contingency removal date or closing date) is treated as a material breach, potentially allowing the other party to cancel and keep or recover damages.
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