During the executory period of a contract whose time of performance is uncertain but which contemplates simultaneous performance by both parties, such as earnest money agreements, neither party can be said to be in default until the other party has tendered his own performance.
• There was no contract provision granting such a right, so C 21 cannot insist that Webb totally satisfy the encumbrance before the final delivery of the contract of sale.
• There must be a tender of one’s own agreed performance to put the other party in default. Tender of deed and tender of unpaid balance should be concurrent conditions.
• Tender by one party may be excused if the other party has anticipatorily repudiated the contract.
• Neither party is in default unless the other tenders performance. What constitutes “tender”? A buyer being ready willing and able is not sufficient tender. A letter could constitute tender, but not when the offer of performance is conditional.
2. Time is of the Essence
? If you want time to be of the essence, stipulate it clearly in the K. Then failure to perform within the time is a material breach. Otherwise, the parties have a reasonable time beyond the date of performance.
? If neither party tenders performance when “time is of the essence”, the parties are discharged from the K.
? If time is not of the essence and the closing date passes, courts will uphold the K if performance within a reasonable time after the closing.
? If there is no K “time is of the essence” provision but the K still makes clear that the K terminated if performance does not occur by a certain date, it is deemed that the parties agree that time is of the essence.
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