Contracts
A Michigan purchase agreement states the closing will occur 'on or before July 15.' If the seller is not ready to close until July 20, the buyer may:
ABe required to wait since closing dates are approximate
BDeclare the seller in breach and cancel the contract✓ Correct
CExtend the closing date automatically by 30 days
DDemand a price reduction for the delay
Explanation
If the contract contains a 'time is of the essence' clause or specifies a firm closing date, failure to close by that date is a breach. Without such a clause, a reasonable delay may be tolerated, but the seller's failure to perform remains actionable.
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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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