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Dear Forms Committee: What does “Time is of the essence” mean in OREF Sale Agreements?

Every OREF Sale Agreement includes a provision in the Miscellaneous section that says: “Time is of the essence of this Agreement.” This provision means that the deadlines throughout the Sale Agreement and any addenda are material to the contract. If either party does not meet an agreed-upon deadline, that party bears the consequences: depending on the nature of the deadline, they may be in breach of contract, they may lose the right to exercise a contingency, they may lose the right to object to a condition, etc.  Unless the other party caused them to miss the deadline, the “time of the essence” clause means that the other party is not obligated to give them more time.

All comments and responses from OREF or its staff, managers, and volunteers are non-legal opinions made for general purposes. Each Forms subscriber must rely solely upon their Principal broker or personal legal counsel for specific advice and instruction. You and your client should independently confirm that the Form(s) you use are legally suitable for the purposes intended and that they are current with respect to all laws and regulations.