Know Your Contract Days: Calendar vs. Business
ORLANDO, Fla. – Florida law doesn’t apply to time computations in real estate contracts, and it’s important to understand that one contract might compute time differently than another contract.
“Read the contract carefully to determine time calculations,” says Meredith Caruso, associate general counsel for Florida Realtors. “This is key to avoiding missed deadlines and potential liability.”
Florida Realtors/Florida Bar contracts
Both the standard version and the “AS IS” version of the Florida Realtors/Florida Bar contracts calculate time the same way.
“The effective date of these contracts is the baseline date for other calculations – the first step in figuring out many of the deadlines in both forms,” says Caruso. “Consequently, it should go without saying that you must know the effective date in order to correctly calculate those contract time periods.”
In the Florida Realtors/Florida Bar contracts, Paragraph 3(b) defines the effective date as the date the last party signs or initials and delivers the offer or final counteroffer.
“Note the element of delivery,” says Caruso. “The effective date isn’t always the date the last party signs. In other words, if the last party signs the offer or final counteroffer on a Tuesday but the contract doesn’t get delivered to the other side until Wednesday, the effective date is Wednesday.”
Standard F: Except for the effective date and time for acceptance, calendar days are to be used to compute time periods, and any time periods or dates ending or occurring on a weekend or national holiday are extended to 5 p.m. of the next business day.
Caruso offers an example: If the effective date of the contract is Wednesday, Nov. 27, 2019, and the time period for making the deposit is “within 3 days after the Effective Date,” the deposit must be made no later than 5 p.m. on Monday, Dec. 2, 2019:
- Wednesday, Nov. 27: Not counted as the language states the time for making the deposit begins after the Effective Date
- Thursday, Nov. 28: Day 1 (This counts even though it’s Thanksgiving, a national legal holiday – holidays only affect time periods if the deadline ends on the holiday)
- Friday, Nov. 29: Day 2
- Saturday, Nov. 30: While this is technically Day 3, the deposit isn’t due as the time period ended on a weekend, which means the deadline is extended to 5 p.m. of the following business day
- Sunday, Dec. 1: The deposit still isn’t due because Sunday is not a business day
- Monday, Dec. 2: The deposit is due by 5 p.m.
Other real estate contracts
Remember that each type of real estate contract may be calculated differently. The Commercial Contract, for example, uses calendar days to calculate time periods – but it does not do this for time periods of 5 days or less, which are computed without including Saturday, Sunday or national legal holidays.
“As you can see, there can be many different ways time is calculated,” says Caruso. “The important thing is to understand how time is computed in each of your deals – and don’t think all contracts are alike. Taking extra time to double check the time computation section of the contract you’re using can save a lot of headaches later.”
© 2019 Florida Realtors®, Meredith Caruso