Contracts
A Massachusetts Purchase and Sale Agreement includes a 'time is of the essence' clause. If the buyer fails to close on the specified date:
AThe seller must give the buyer a reasonable extension before declaring default
BThe buyer is immediately in default and the seller may retain the deposit✓ Correct
CBoth parties automatically receive a 7-day extension
DThe contract automatically terminates and both parties are released
Explanation
When a Massachusetts P&S includes a 'time is of the essence' clause, failure to close on the specified date constitutes an immediate breach. The seller may declare the buyer in default and retain the deposit as liquidated damages without granting additional time.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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