What is the result if one party does not perform by the specified closing date without "time is of the essence"?

In real estate transactions, "time is of the essence" is a critical clause that emphasizes the importance of meeting contractual deadlines. When this phrase is included in a contract, it indicates that timely performance is a crucial component of the agreement. Without this clause, the implications of a party not performing by the closing date can vary significantly.

When one party does not perform by the specified closing date and the contract does not include the "time is of the essence" provision, the delay may not automatically be considered a material breach. Instead, the situation allows for some flexibility. The key factor to assess here is the reasonableness of the delay. If the delay is deemed reasonable under the circumstances, the non-performing party may still be allowed to fulfill their obligations without the other party being able to walk away from the contract or claiming an immediate breach.

This means that if the delay does not significantly impact the other party's interests or the overall intent of the contract, it may not rise to the level of a material breach. Thus, the correct option reflects the understanding that delays can be permissible under certain conditions when the performance time is not strictly enforced. This is an important distinction that affects how parties navigate and enforce their contractual rights in real estate transactions.