TIME IS OF THE ESSENCE - What this clause
in the contract means to you, the buyer.
The wording in the Contract of Sale for Maryland Real Estate is the following:
TIME IS OF THE ESSENCE. Time is of the essence of this Contract. The failure of Seller or Buyer to perform any act as provided in this Contract by a prescribed date or within a prescribed time period shall be a default under this Contract and the non defaulting party, upon written notice to the defaulting party, may declare this Contract null and void and of no further legal force and effect. In such event, all Deposit(s) shall be disbursed in accordance with Paragraph 22 of this Contract.
Some of the critical dates in the contract that would be covered by this clause are:
Date by which the Purchaser must make a loan application.
Date by which the Purchaser must complete the inspections.
Date by which the Seller must respond to the Home Inspection Notice, if any.
Date by which the Purchaser must have their loan commitment from the lender.
Date by which the Seller must provide a good title to the property (Settlement Date)
Any dates or times to which the buyer and seller have agreed. If either buyer and seller fail to perform under the contract, the other party may send a notice to the defaulting party that they intend to void the contract. While this may appear to be an extreme action, if either party fails to perform under the contract, the damages to the other party may be severe. Contracts are a serious matter and are legal binding documents.
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