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Contract Closing Date and Time of the Essence

Inserting "on or about" in the contract of sale before the closing date is advisable because it merely reflects the case law that allows either party reasonable adjournments.

Inserting "on or before" or "no later than" has been held not to imply that time is of the essence. Whitney v. Perry, 208 A.D.2d 1025, 617 N.Y.S.2d 395 (3d Dept. 1994) (provision for closing "no later than" 60 days after scheduled date did not make time of the essence); DeCicco v. Staehle, 11 A.D.3d 425, 783 N.Y.S.2d 380 (2d Dept. 2004) ("on or before" closing date did not make time of the essence); Lightle v. Becker, 794 N.Y.S.2d 415 (2d Dept. 2005) (closing "on or about 7/10, but not later than 8/10" did not make time of the essence; sellers entitled to cure title two weeks later).

The Court of Appeals has agreed and has now settled the matter. ADC Orange, Inc. v. Coyote Acres, Inc., 7 N.Y.3d 484; 857 N.E.2d 513; 824 N.Y.S.2d 192 (2006) (phrase "in no event later than" insufficient to make time of the essence).

The parties should say "time of the essence" in the contract of sale if that is what they mean, but it is not customary to do so.

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This page contains a single entry from the blog posted on June 29, 2007 2:35 PM.

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