“On or Before” Is Not So “Hard and Fast”

Generally, a contract for the sale of real property sets a closing date that creates a legal obligation on both parties to the contract to perform within the time specified.  Failure by one of the parties to perform on the closing date may constitute a material breach of the contract and may result in a forfeiture of the earnest money deposit, a demand for specific performance, or both.

What happens when you use the language “on or before” along with a date in the closing provision of the contract? Some are under the assumption that the insertion of this language gives one of the parties to the contract the right to choose the closing date, creating a false impression with your buyer that the buyer can unilaterally require the seller to close early. In fact, use of the language “on or before” has no binding effect at all, unless of course the contract contains a specific declaration to that effect.  However, the phrase can show the flexibility and/or willingness to close early, if possible, and if both parties agree.

Now let’s assume one party wants to close before the closing date? Can that party hold the other party to the “on or before” language to an earlier closing date?  When a contract for sale of real property includes the “on or before” language both parties have the option to close on the stated closing date or on a date other than the stated closing set forth in the closing provision. However, they are under no obligation to the other party to close early. The Florida Realtor/ Florida Bar (FAR BAR) contracts even allowunder extenuating circumstances, such as clouds on title, failure to procure the necessary financing or missing documents, that a party may be entitled to a reasonable extension of the closing date.

Notwithstanding, the fact that the stated closing date in a contract with “on or before” language is a hard and fast deadline, particularly if the contract includes “time is of the essence” language, at any time both parties to the contract can agree to move up or back a closing date. Therefore, the insertion of the “on or before” language is not always recommended unless specific clarifying provision is made elsewhere in the contract; sometimes including this language can create confusion, as different people interpret it in different ways. As always, should you have any questions related to contract dates, we urge you to consult with your local real estate attorney.

With that being said…. this year will be closing “on or before” December 31, 2016!

May you all have a Happy, Healthy, Prosperous 2017! Happy New Year from all of us at Berlin Patten Ebling!


Berlin Patten Ebling, PLLC

Article Authored by Elizabeth Wexler, Esq.  ewexler@berlinpatten.com

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged. 



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