Contracts
In NJ, 'time is of the essence' language in a contract means:
AThe parties should try to close on time but delays are acceptable
BDeadlines in the contract are strictly enforceable and failure to perform by the date specified may constitute a material breach✓ Correct
CThe attorney review period is shortened
DThe closing must occur within 24 hours of signing
Explanation
'Time is of the essence' makes all contractual deadlines strictly enforceable. A party who fails to perform by the stated date is in material breach and may forfeit their deposit or other rights.
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Key Terms to Know
Option Contract
A 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.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
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