One of the many questions we receive from real estate agents is how to count “Days” in the California standard purchase contracts (CAR and PRDS).
More specifically, how are “Days” counted on a Notice to Perform (NBP or NSP)?
“Days” in the CAR Purchase Agreement and Notice to Perform
The CAR purchase agreement (“RPA”) in Paragraph 30 F states that:
“Days” means calendar days. However, after Acceptance, the last Day for performance of any act required by this Agreement (including Close of Escrow) shall not include any Saturday, Sunday or legal holiday and shall instead be the next Day.
This means that the “Days” in the contract are calendar days including weekends and holidays when counting, unless the deadline for performance lands on the weekend or a holiday. The required period for performance on a Notice to Perform is two days or whatever is agreed by the parties in the RPA (in no event can it be shorter than 2 days). The first day that the Notice to Perform is delivered is counted as Day Zero and the next is Day One and so forth. The buyer will have to perform within two days from delivery, otherwise the seller can issue a unilateral cancellation notice after non-performance.
For example, if the Notice to Perform is delivered to the buyer on a Monday with a 2-day performance period, then Monday is counted as Day Zero, Tuesday is counted as Day One, and Wednesday is counted as Day Two. The buyer will have to remove the contingency by 11:59pm Wednesday to avoid the seller’s right to cancel first thing Thursday.
If the Notice to Perform is delivered to the buyer on Thursday with a 2-day performance period, then that Thursday is Day Zero, Friday is Day One, and Saturday is Day Two. In this case, the last day to perform is extended to the following Monday (assuming Monday is not a holiday) because the performance period cannot end on the weekend. Also, the deadline for the buyer removal of the contingency will be 11:59pm Monday.
There is one exception to CAR RPA’s default of counting days in calendar days. The initial deposit is counted in business days as specified in Section 3 Paragraph A. By way of example, if the purchase contract is ratified on Thursday, the buyer has 3 business days to deposit the earnest money into escrow. Thursday will be counted as Day Zero, Friday is Day One, Monday is Day Two and Tuesday is Day Three.
“Days” in the PRDS Contract and Notice to Perform
The way days are counted in the PRDS purchase contract is the same as described in the CAR RPA. Calendar days are counted as “Days” except for initial deposit issues. If the last day for performance falls on the weekend or a holiday, then the last day to perform is extended to the next regular business day. Under Paragraph 27L of the PRDS purchase agreement:
TIME: Time is of the essence in this Contract. Any extensions of Time Frames specified in this Contract must be in writing, signed by the Parties and Delivered to the Parties. Except as otherwise expressly stated, the word “days” shall mean calendar days; “Business Days” shall be defined as Monday through Friday, legal holidays excepted.
One difference in the PRDS’ Notice to Perform is that the time period of performance is always two Days instead of CAR’s “2 or ___ Days”.