Issue: Under the laws of the state of Minnesota, where a date is recited in a purchase agreement as the ‘closing date,’ if that date is not the date the contract is signed, does it negate the effect of the contract?
|Area of Law:||Business Organizations & Contracts|
|Keywords:||Closing date; Purchase agreement; Completion date|
|Cited Cases:||352 N.W.2d 494; 510 N.W.2d 756; 287 N.W.2d 645; 439 N.W.2d 217|
Purchase agreement dates are not deadlines, but goals, particularly where the parties’ conduct indicates that the deadline has been implicitly waived or extended. 14 Richard R. Powell & Patrick J. Rohan, Powell on Real Property ¶ 881 at 81-135 (1997) [hereafter Powell]. Once a designated date has passed, the non-delinquent party may preserve the contract by fixing a new date for completion of the contract. Id., ¶ 881 at 81-142. Notwithstanding the expiration of the Purchase Agreement, the parties may still choose to go ahead and close the transaction contemplated by the purchase agreement and thereby waive the Purchase Agreement’s "expiration.”FN1
Alternatively, a court may find that the parties waived the purchase agreement deadline by delivering the agreement after the deadline passed. C.G. Schmidt, Inc. v. Tiedke, 510 N.W.2d 756, 756-57 (Wis. Ct. App. 1993); Bergfield v. Farm Credit Banks, 439 N.W.2d 217, 218 (Iowa Ct. App. 1989). Courts frequently use waiver or estoppel doctrines to avoid enforcing rigid times for performance in real estate transactions. Powell, supra, ¶ 881 at 81-144. Thus, even assuming that there was a rigid date set forth by the Purchase Agreement, the court in equity could grant relief for the delay if the record showed there would be hardship to the optionee and little loss to the optionor. Trollen v. City of Wabasha, 287 N.W.2d 645, 647 (Minn. 1979).
FN1Powell notes that where a party […]