U13&14 Closing date and Time is of the Essence

Question 1

When is a closing date TOE?

Answer 1

When the contract explicitly says so

“closing date is not TOE unless specified as such in the k”

Question 2

What happens if k says closing date is TOE and a party fails to close on that law date?

Answer 2

it is material breach- breaching party defaults and doesn’t get deposit back

Question 3

if closing date is not TOE and closing doesn’t occur, what happens next?

Answer 3

either party may set a new date and make that date TOE

Question 4

How to make a non-TOE contract TOE?

Answer 4

By providing a TOE Notice

Question 5

Requirements of a TOE Notice?

Answer 5

it must be clear, distinct and unequivocal notice

fixes a reasonable time to perform

informs other party he will be in default if he fails to perform

Question 6

How much time is reasonable? (in a TOE Notice)

Answer 6

It is a fact and circumstances test.

Question 7

What will the court consider in their facts and circumstances test for the reasonability of a toe notice?

Answer 7

Nature and object of the contract

presence or absence of good faith

conduct of the parties

experience of the parties

Question 8

What happens if the k calls for closing “on or about a date”?

Answer 8

parties must first fix a law date

then (when the other party doesn’t close)–give a TOE notice