The GCAAR Regional Sales Contract provides basic definitions to clarify
We receive many phone calls from real estate agents asking us, "I have this contract that was ratified on "x" date, it has a home inspection contingency, but we didn’t get notification until "y" date, so have the parties met their obligations under the contract?"
Let’s start with the actual contract itself. Paragraph 26 of the GCAAR Form #1301 – Regional Sales Contract provides us with some basic definitions:
Day or Days are considered to be calendar days unless otherwise directed in the Contract.
Date of Ratification is the date upon which both Purchaser and Seller accepted in writing all terms of the Contract.
Computing Time Period commences on the first day after delivery of the document; with the contingency period expiring no later than 9:00 pm Eastern Standard Time on the date specified in the Contract.
What exactly does this mean? Let’s consider the following scenario:
Jane Doe (Purchaser, hereinafter “Jane”) enters into a contract to purchase property on 123 A Street, NW, Washington, DC from John Smith (Seller, hereinafter “John”). Jane signs and delivers the contract on Nov. 1, 2012 to John and he reviews the contract, accepts the offer and signs and delivers the fully executed contract on Nov. 3, 2012.
Therefore, Nov. 3, 2012 becomes the Date of Ratification.
The contract states that Jane had until 9:00 p.m. on the 10th day after the Date of Ratification to conduct a home inspection. Since we count calendar days from the Date of Ratification, the starting of the clock for Jane begins on November 4, 2012 and ends at 9:00 p.m. on November 13, 2012, at which point Jane must advise John of the items she would like to have repaired along with the inspection report, or a notice declaring that the contract is void.
Let’s assume that Jane provided the inspection report and list of items to be repaired to John on Nov. 10, 2012 by 9:00 p.m. (3 days earlier than she needed to). That stops the clock on her requirements, and starts John’s next deadline.
John then has 3 days after delivery to accept the terms Jane provided or provide a counter-offer to the items to be repaired. John’s clock would therefore start on Nov. 11, 2012 and end by 9:00 p.m. on Nov. 13, 2012.
Let’s assume that John made a counter-offer to Jane and delivered it to her by 9:00 p.m. on Nov. 13, 2012. Jane then has 3 days from the date of delivery to decide whether she would accept his offer or propose her own counter-offer.
The negotiations would then continue this way until the parties reached a final agreement.