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Timing is everything
Pay close attention to contract deadlines.
The legal hotline routinely receives calls about time periods under the contract forms. Here are a few answers to help you decide if time is on your side.
Does the term days in the TREC contract forms mean calendar days or business days?
Calendar days. Do not extract weekends or holidays when calculating deadlines under the TREC contract forms.
Is the first day under a time period that is measured from the effective date, such as the option, the day the contract is signed and accepted by all parties or the day after?
The day after final acceptance.
A contract is accepted and is binding on December 13 at 11 a.m. On what day and at what time does the 15-day option period expire?
December 28 at 11:59 p.m.
The option period expires on a Sunday. Does that mean it’s automatically extended until the next day?
No.
The option period expired on a Sunday. The buyer called the seller Monday morning and said he wants to terminate. Is the buyer entitled to terminate?
Not under the terms of the option. Time is of the essence with respect to the option period. Time is not of the essence for other time periods in the contract, unless expressly stated.
On the 10th day of a 15-day option period, the buyer sent the seller a proposed amendment setting forth repairs the buyer wants. The seller has not responded. It is now day 15. Is the option period extended until the seller responds?
No. Neither party is obligated to respond to a proposed amendment, although common courtesy may suggest a response. If the seller does not respond to the proposed amendment and the buyer does not terminate before 11:59 p.m. on the 15th day, the buyer will, under the terms of the option, have accepted the property in its present condition.
The buyer is in Ardmore, Oklahoma. The contract was negotiated by fax. May the parties sign the fax of the contract and may the buyer pay the seller the option fee later?
The parties may sign the fax of the contract, but if the buyer wants to be assured that he has the right to terminate under the option provision, the buyer must tender the option fee to the seller on or before the time the contract is binding on the parties. The TREC contract forms state that there is no option unless both blanks in paragraph 23 have been completed and the buyer has paid the seller the option fee. The risk that the seller will not later accept the option fee and claim that the buyer has no right to terminated under paragraph 23 is substantial.
The seller is in Tuscaloosa, Alabama. If the buyer tenders the check for the option fee to the seller’s agent during negotiations, has the option fee been tendered to the seller?
Yes, absent any express statement by the seller’s agent that he does not have authority to accept the check for the option fee for the seller.
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