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Real estate purchase and sale contracts have included the magic language, “Time is of the Essence” (TOE), seemingly since time immemorial. This term of art has been imbedded in the lexicon of a multitude of commercial contracts to an indelible extent and has earned general acceptance and use in our culture. For example, “Time is of the Essence” is the name of a jazz album (Michael Brecker), and you do not see many records named after real estate contractual provisions.
Practitioners should be mindful, however, of the meaning of TOE and the significance of its absence from a contract. In 1989 and 2001, the lead author of this article co-wrote several articles discussing and interpreting New York law governing TOE provisions in real estate contracts. Recent decisions interpreting TOE indicate a consistency of interpretation, but with certain wrinkles of which attorneys should be aware.
Is the 'T' in TOE Reasonable?
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