Contracts
A Mississippi real estate sales contract contains a provision stating 'time is of the essence' and a closing date of September 1. What happens if closing does not occur on September 1?
AClosing automatically extends to September 15
BEither party may declare the other in default for failing to close on the stated date✓ Correct
CThe contract automatically extends for 30 days
DOnly the buyer can be held in default for not closing on time
Explanation
When 'time is of the essence' is stated in a contract, the closing date becomes a material term. Failure to close on that exact date may allow either party to declare the other in material breach and pursue available contract remedies (termination, retention of earnest money, damages).
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