What happens if a party fails to tender at closing in a "time is of the essence" contract?

In a "time is of the essence" contract, prompt performance by the parties is essential, and any failure to meet the specified deadlines can result in serious consequences. When a party fails to tender performance at closing, they are typically presumed to be in breach of the contract.

This presumption is rooted in the principle that "time is of the essence" indicates that parties intended to adhere strictly to the deadlines set forth in the agreement. Consequently, if one party does not fulfill their obligation at the designated time, it essentially gives rise to a breach, allowing the other party to terminate the contract and seek damages or alternative remedies.

This rigid approach prevents parties from taking advantage of leniency or delays, ensuring that the transaction proceeds as intended. The other options do not align with the consequences of failing to perform under a "time is of the essence" clause, as extensions, recovery of costs, or renegotiation would undermine the commitment to timely performance that such a clause mandates. Therefore, the correct understanding is that failing to tender at closing in this context indeed signifies a breach of contract.