Saturday, April 2, 2011

On or about?

A highly contested question in the transactional area of law. Does “on or about” mean on that date, around that date, within thirty days of that date?

Unless a contract of sale specifically states that “time is of the essence”, then either party may adjourn the closing date by requesting a reasonable adjournment. Zev v. Merman, 134 A.D.2d 555, 521 N.Y.S.2d 455 (2d Dept. 1987), aff’d 73 N.Y.2d 781 (1988). Whether the adjournment is reasonable or not is for the courts to decide.

In cases where there is no “time of the essence” or “law date” are explicitly stated, once the date passes, a seller may not retain the contract deposit and the buyer cannot immediately sue for specific performance. Once that occurs, that party must make a good faith effort to attempt to schedule a second closing date, and if this does not occur, they may set a closing date.

If the contract specifically states that time is of the essence or has a “law date”, then the closing must happen on that date, and either party is in breach for non-compliance.

Contracts commonly read “on or about”, “on”, or “on or before” which essentially mean the same thing: on or about. These only become “time of the essence” contracts if a letter is subsequently sent, from either party’s attorney, declaring that time is of the essence, and setting a date for the closing.