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Kasten Construction Co. v. Maple Ridge Construction Co

    Brief Fact Summary. Maple Ridge Construction Co. (Plaintiff) was to buy thirty-four “finished” lots from Kasten Construction Co. (Defendant). The Defendant did not perform within the time allowed and the Plaintiff sued to enforce specific performance.

    Synopsis of Rule of Law. In a case involving specific performance, when the intention of the parties is always the controlling factor, the general rule is that time is not of the essence of the contract of sale and purchase of land unless a contrary purpose is disclosed by its terms or is indicated by the circumstances and object of its execution and the conduct of the parties.

    Facts. In this case Plaintiff was to buy thirty-four “finished” lots from Defendant within sixty days of the contract for sale, but the contract did not state that time was of the essence. The lots were to be “finished” insofar as the utilities, streets, curbs, gutters, and water were to be complete prior to the settlement of the sale. The Plaintiff allowed Defendant an extension, but by the end of the extension, the lots were still not finished. The Plaintiff had, in reliance on the contract, expended $12,000.00, however, the Defendant stated that it considered the contract null and void due to the expiration of the time limitation. The Defendant did not perform within the time allowed and the Plaintiff sued to enforce specific performance.

    Issue. Is the Plaintiff entitled to specific performance of the contract?

    Held. Yes. Judgment of chancellor in decreeing specific performance affirmed.
    In a case involving specific performance, when the intention of the parties is always the controlling factor, the general rule is that time is not of the essence of the contract of sale and purchase of land unless a contrary purpose is disclosed by its terms or is indicated by the circumstances and object of its execution and the conduct of the parties.
    Because the contract here did not specify that time was of the essence, the chancellor was correct in ordering specific performance.
    The general rule is that even when a contract for the sale of land specifies a date for consummation, equity treats the provision as formal rather than essential. It also permits the purchaser to make payments after the prescribed date and to compel performance by the seller, unless it appears that time is of the essence by the words of the contract.
    Because the chancellor found that the delay in this case was reasonable, the chancellor’s ruling of specific performance in favor of the Plaintiff is affirmed.

    Discussion. Since the intent of the parties is essential in interpreting the terms of a contract, it must state that time is of the essence. The court will not infer that this was the intention of the parties, if it does not specifically state this in the contract.


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