Contracts
Iowa's real estate contracts often use the phrase 'time is of the essence.' What happens if a party fails to meet a contractual deadline?
AThe contract automatically extends by 30 days
BFailure to perform by the deadline may constitute a material breach of contract✓ Correct
CThe IREC can enforce the deadline for the parties
DOnly the buyer's earnest money is affected
Explanation
When a contract includes a 'time is of the essence' clause, all deadlines are strictly enforceable. Failure to perform by the specified date may constitute a material breach, entitling the non-breaching party to pursue remedies including termination of the contract and damages.
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