4 Reasons to Pay a Concord Real Estate Lawyer to Review Your Real Estate Contracts
January 25, 2017
Deeds Signed Under Power Of Attorney
January 25, 2017
Show all

TIME IS OF THE ESSENCE: WHEN IS A DELAY IN CLOSING A BREACH OF CONTRACT?

By: Ryan C. Hawkins

When a real estate sales contract provides that the buyer will close on a certain date and the buyer does not close on that date, is the buyer in breach of contract? The answer is “no” because usually real estate sales contracts do not contain a phrase providing that “time is of the essence as to the closing date”. If such a phrase is contained in a sales contract, then the buyer’s failure to close on the date specified in the contract is a breach of contract.

Under North Carolina law, dates are not considered crucial in a contract in the absence of an expressed provision making time of the essence. For an example, if a home construction contract states that the builder will complete the home “on or before November 1” and the house is not completed on November 1, the courts will not declare the builder in breach of the contract unless the parties have expressly provided that “time is of the essence”. Where the contract does not have this provision, the courts assume the parties did not consider the closing date or completion date to be a substantial or material element of the contract.

In the absence of a “time is of the essence” provision, when does a delay in closing become a breach of contract? The answer to this question is fact specific and can depend on the terms of the contract being used and the intention of the parties to the contract. If you have questions regarding a possible breach of contract because of a delaying party, contact the experienced real estate attorneys at Ferguson,  Hayes, Hawkins & DeMay, PLLC.

Ryan C. Hawkins is a Cabarrus County Real Estate Attorney and a partner at Ferguson,  Hayes, Hawkins & DeMay, PLLC. Mr. Hawkins is also a member of the Real Property Section of the North Carolina Bar Association.