medium · National Real Estate Exam contracts
An installment land contract contains a clause stating that 'time is of the essence.'
If the buyer misses a payment by two days, what is the most likely legal outcome based on a strict interpretation of this clause?
- The contract is automatically converted into an option to purchase.
- The buyer is granted a mandatory 30-day statutory grace period to cure the default regardless of the contract language.
- The seller may have the right to declare an immediate forfeiture and retain all previous payments as liquidated damages.
- The seller must accept the late payment but can charge a penalty equal to 10% of the property value.
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