PAULA'S SOUTHAMPTON BLOG

"TIME IS OF THE ESSENCE"...A Necessary Clause Or Another Legal Snafu?

"TIME IS OF THE ESSENCE"...A Necessary Clause or Just Another Legal Snafu?

In my experience in the past, when a "Time is of The Essence" clause was put into a contract of sale it was a rare event. Usually there was a good legal reason for inserting it into a contract of sale and it was always very carefully handled: Pre-paid registered or certified letters were sent to all parties involved stating the fact that the clause is being inserted in the contract and the reasons why. 

In my past experience it happened rarely and it was always done with both sides agreeing to the fact, if there were extenuating circumstances that required such a clause.

Now, I have three deals that have the clause written into the contract and one deal has fallen apart because there is a refusal on the  part of the buyer to accept it.

The buyers lawyer advised them not to sign because they could go into default and lose their deposit if for any reason a bank could not close on said date. In the case of the sellers attorney, their heels were dug in and they would not give in.

In none of these deals is there any just cause to use the clause---just a difficult lawyer wanting to exert the power of "Time is of the essence" to make sure there is no "grace period" given to the buyer---no flexibility, in other words!

EVEN IF INTENTION IS TO MAKE THE CLAUSE APPARENT, VERBAL SPECIFICITY  IS CRITICAL!

So, I did a little research and am finding out that there several reasons that this clause is considered defunct in a court of law if it is used carelessly:

  • The failure to provide the other party with clear, distinct and unequivocal notice sent by prepaid registered or certified mail. 
  • The letter states that "I merely want to note that there is a 'Time Is Of The Essence' clause and your co-operation will be greatly appreciated". This kind of language surrounding the notice is ambiguous and vague and a court would be unable to discern the "requisite intention" of the parties to make the closing "of the essence".
  • If the letter is sent by ordinary mail, facsimile or email it is considered insufficient notice.
  • An oral agreement or conduct that is evidence of of a "waiver" (such as language that is vague) may stop a party from enforcing the"time is of the essence" clause.

...and the list goes on and on.

Have you had an experience with "Time Is Of The Essence"? If so,  please comment below as to how you handled it or what you learned from the circumstances.

 

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~          

                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY.  The views expressed herein are my personal views and do not reflect the views of Douglas Elliman Real Estate

 

Paula I. Hathaway, Senior Broker Associate, Douglas Elliman Real Estate

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005

 

Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill:  http://www.elliman.com/paulahathaway

 http://www.hathawayhamptonhomes.com

MY REAL ESTATE SHOWS:

http://www.realestateshows.com/671362

http://www.realestateshows.com/671345

http://www.realestateshows.com/651587

http://www.realestateshows.com/flyer.php?id=654265

 

Comment balloon 8 commentsPaula Hathaway, REALTOR, Sr. LBA, • February 05 2014 01:14PM
"TIME IS OF THE ESSENCE"… A Necessary Clause Or Another…
share
"TIME IS OF THE ESSENCE"… A Necessary Clause or Just Another Legal Snafu? In my experience in the past, when a "Time is of The Essence" clause was put into a contract of sale it was a rare event. Usually there was a good… more
LOOKING INTO THE FUTURE IS FASCINATING… Try It; You Might Like It!
share
LOOKING INTO THE FUTURE IS FASCINATING… Try It; You Might Like It! Back in December 2011, I made a risky decision to look into the future to see what may be in store for us in the years to come. We were still in the midst of the morass of the… more
HOW DO YOU ENTER CO-EXCLUSIVES ON TRULIA AND ZILLOW???
share
HOW DO YOU ENTER CO-EXCLUSIVES ON TRULIA AND ZILLOW??? After all the troubles that agents report over the sites Trulia and Zillow, many of the agents here in the Hamptons have decided to get on board, in spite of all the hoopla. After I… more
A SELLER WHO WILL NOT LEAVE THE HOUSE WHILE YOU SHOW IT… Is A Seller…
share
A SELLER WHO WILL NOT LEAVE THE HOUSE WHILE YOU SHOW IT… Is A Seller Who Does NOT Want To Sell!!! The time is now to clarify why it is totally unaceptable for the owner to remain on the premises while it is being shown for sale. Just a… more
WHO IS THE KEEPER OF THE KEY?… A Deal Closes And No One Has The Key!
share
WHO IS THE KEEPER OF THE KEY?… A Deal Closes And No One Has The Key! I have a client who is selling his home; he bought the house with a tenant in place and then decided the house was too small for his family--so he wants to sell it. … more
This is the best post I have read all year: "Slipping Into 2014…
share
This is the best post I have read all year: Slipping into 2014 by Patricia Kennedy, is full of the right sort of verbal incentives to make the right changes in your fitness and your day to day activities. I mean it---the point… more
HAPPY NEW YEAR TO YOU!!!… After A Year Of Loss, I Feel Like I Can…
share
HAPPY NEW YEAR TO YOU!!!… After A Year Of Loss, I Feel Like I Can Make It! Let me think; This is the year that wasn't for me! I was followed by a sense of loss all year and it has kept it's grip right up to the last few weeks of this year---I… more
HOW WILL AGENTS BETTER SERVE THEIR BUYERS AND SELLERS IN 2014?
share
HOW WILL AGENTS BETTER SERVE THEIR BUYERS AND SELLERS IN 2014?… A Technology Idea: When I read the AR post about the INMANNEXT invitation/opportunity for all of the members of ActiveRain to make predictions about how real estate wil be… more
WHAT IF YOU DON'T KNOW THE AREA?… THE BLIND LEADING THE BLIND!!
share
WHAT IF YOU DON'T KNOW THE AREA?… THE BLIND LEADING THE BLIND!! Many agents think it does not matter if they are unfamiliar with an area that they are trying to sell in. But that is the one thing that buyers today require: An agent with Local… more
"AGENT MATCH" IS OVER; WHAT BETTER WAY TO MATCH AGENTS THAN…
share
"AGENT MATCH" IS OVER; WHAT BETTER WAY TO MATCH AGENTS THAN ActiveRain? I saw the letter that was written by the NAR official telling us why they are discontinuing the Agent Match website---I congratulate them for finally seeing… more