Hawaii Pre-Licensing National Practice Exam

When a contract states "time is of the essence", how must the contract be presented?

1. At the buyer's convenience

2. As soon as possible

3. Only after all parties agree

4. Only at closing

The correct answer is: As soon as possible

When a contract includes the phrase "time is of the essence," it signifies that the timing specified in the contract is crucial and must be adhered to strictly. This phrase holds legal significance, indicating that any delays or failure to meet deadlines may result in the contract being voided or the possibility of legal action by the aggrieved party. Presenting the contract "as soon as possible" aligns with the notion that all parties should act promptly to fulfill their obligations in a timely manner. This emphasizes the importance of adhering to the timelines set forth within the contract, ensuring that all parties are aware of their responsibilities and can avoid potential disputes or misunderstandings regarding deadlines. In contrast, presenting it at the buyer's convenience, only after all parties agree, or only at closing would not meet the urgency implied by the phrase. These approaches could allow unnecessary delays which could potentially jeopardize the contract's validity and the interests of the parties involved. Therefore, promptness in presenting the contract directly reflects the significance of the deadlines stipulated within it.