Time is of the essence in Nevada purchase agreements

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Most state courts, including the Nevada Supreme Court, recognize and enforce the integrity of the “time is of the essence” clauses. The Nevada Supreme Court recognizes that, under common law, a delivery of money, which a party is obligated to pay at a specified time and place, must be made on the day set for payment, and not later, and that reparation against confiscation will not be possible. granted when the execution time is made essential by the express terms of the contract, stating, “[a] A court of equity has no more right than a court of justice to a dispensation with an express stipulation of the parties regarding the time in contracts of this nature. “In one case, the Nevada Supreme Court rescued the delinquent buyer from the harsh seizure of the” installment purchase agreement “whereby the installment buyer (the equitable homeowner) was in arrears of just $ 63.75 in installment payments. taxes and interest, and the seller had attempted to enforce the buyer’s fair interest, pursuant to a severe contract and Unfair Forfeiture Clause Many times the court will bail out the delinquent buyer, as it has in many “conversion” type cases. equitable “that arise under installment purchase agreements, to avoid severe and unfair seizures.

“Equitable conversion” cases are those in which the buyer purchases the property in an installment “deed”. In such cases, even if the deed and “legal title” are not delivered until all payments have been made, “equitable title” is held by the buyer in the interim. In an often cited deed purchase contract, the Nevada Supreme Court rescued the buyer from total forfeiture of the property, allowing reasonable time to cure, even though the time clause is essential, because the default was minor. compared to the substantial forfeiture that would have occurred if the court had not bailed out the buyer in equity. In Earring, the installment buyer was given a reasonable time to cure a default of $ 8,320.28 in light of the substantial investment of $ 90,000 in the disputed motel. Courts have been willing to bail buyers from severe forfeitures when they have peacefully and lawfully taken possession and improved the property and / or made substantial payments on it. However, in cases of unfair conversion, the courts have not been so willing to bail out and will demand strict compliance with the “time is of the essence” provision. The Nevada Supreme Court has held that, [t]The rule is well established that in order for a buyer to be able to successfully sue a seller for damages for breach of a land sale contract, the buyer must show that he has met all of the preceding or competitive conditions, or that such compliance has been excused. .

Even the decisions of the courts of appeals of the surrounding states hold identically to Nevada jurisprudence, that a seller of real property, pursuant to a real property purchase agreement, is justified in canceling the security deposit if the Buyer has failed to fulfill a material part of the contract that is a competing condition or precedent to the seller’s performance obligations. In one case, the real estate buyer offered to perform within three hours of the specified time for performance. The appeals court ruled that the buyer had defaulted and was not entitled to a specific performance, because the “time is of the essence” clause and the plain language contained in that purchase agreement caused the contract to expire precisely three hours before performance. proposal.

It has been held that if neither party offers performance by the date set for the closing under a contract that stipulates that time is of the essence, then the duties of both parties are fulfilled beyond that date.

When the escrow agreement specifies a defined time for performance, performance must occur within the time limit of the agreement, and the escrow agent has no power to deliver a deed thereafter. It is well established that performance must be within the time limit of the escrow agreement.

The Nevada Supreme Court recently held that “this court will not rewrite the parties’ contract and will require strict enforcement of the ‘time is of the essence’ provision.

So real estate agents, attorneys, and buyers beware: the “time is of the essence” clause is still in effect in Nevada and surrounding states. Most courts will rely on this clause and long-standing precedents to deny any compensation to a late buyer, based on the strong legal principle that a purchase agreement expires on its own terms and will not be rewritten or extended by the court. The exception to the rule applies to avoid a severe and unfair forfeiture when a delinquent installment buyer is rescued from a severe forfeiture that would not be justified by a relatively minor breach that could be remedied within a reasonable time. In such cases, equity laws will intervene to promote equity and avoid severe and inequitable confiscations that would otherwise result from the strict application of the “time is of the essence” clauses. In such cases, the courts have favored an action for damages rather than the total loss of a substantial equitable interest.

Copyright 2008, all rights reserved. www.HugginsLaw.com

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