Contracts
A Washington real estate contract specifies that 'time is of the essence.' What does this phrase mean?
AThe parties may request extensions as needed without consequences
BDeadlines in the contract are absolute and failure to perform by the specified date constitutes a material breach✓ Correct
COnly the closing date is a firm deadline
DThe phrase is legally meaningless boilerplate language
Explanation
A 'time is of the essence' clause makes all stated deadlines absolute and material. Failure to perform by a deadline (such as the closing date) constitutes a material breach of contract, allowing the non-breaching party to cancel and pursue remedies.
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA 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.
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