Does a contract become void if the parties fail to close within seven days of the Settlement Date?

QUESTION: I have a listing under contract with Form 2-T (Offer to Purchase and Contract), and the buyer’s agent just informed me that the buyer needs to delay closing until nine days after our scheduled Settlement Date. My seller still wants to sell the property, but they do not want to sign an amendment extending the Settlement Date. Can my seller simply wait to see whether the buyer closes on the ninth day without amending the contract? Will the contract automatically become void if we don’t close within the seven-day grace period?

ANSWER: Yes and no, respectively.

If the parties fail to complete Settlement and Closing within seven days of the Settlement Date, the delaying party is in breach and the non-delaying party has the right to terminate under Form 2-T. Even though the non-delaying party has the right to terminate, they do not have to. The contract does not automatically become void just because the grace period has passed. Instead, it remains effective until it is terminated. Therefore, a seller can choose not to terminate and move forward with Closing on the ninth day without signing an amendment.

It is worth noting that if your seller were to agree to extend the Settlement Date using the Agreement to Amend Contract (Form 4-T), the buyer would receive another seven-day grace period after the new Settlement Date unless the parties check the box in Form 4-T to shorten the grace period to four days instead of seven. So, avoiding a formal extension may well be in your seller’s best interest.

Agents should also note that listing agents should not tell the buyer’s agent that Closing on a later date is acceptable unless the seller has said so in writing. Depending on the circumstances, a court could determine that an agent’s statements, combined with other evidence, show that the seller waived their right to terminate even though the contract clearly states otherwise. This is because when an agent acts with either actual or apparent authority, their statements may waive the seller’s rights in the contract.

You can read more about an agent’s actual or apparent authority to bind a client here. The same concerns regarding waiver also apply when agents informally adjust deadlines for payments, such as the Due Diligence Fee and Earnest Money, which you can read more about here.

All that said, so long as you carefully communicate with the buyer’s agent and follow your seller’s specific written direction, then the informal extension your seller wants is permissible and perhaps in their best interest. The contract will not expire or become void during the two days that your seller wishes to wait and see if the buyer performs.

Release Date: 10/15/2026

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