## Facts

- Kasten agreed to sell Maple Ridge thirty-four “finished” residential lots in a subdivision; “finished” meant completed streets, curbs, gutters, and utilities before settlement.
- The contract set settlement within sixty days but did not state that time was of the essence.
- Maple Ridge obtained a written extension of settlement to on or before March 19, 1965, again without any time-is-of-the-essence term; Kasten refused further extensions.
- By the extended settlement date, Kasten had made limited progress and had not completed necessary development work (including utility and road-related items and required county arrangements) to deliver “finished” lots.
- Kasten recorded subdivision covenants and restrictions affecting financing and development without Maple Ridge’s participation.
- Maple Ridge incurred reliance costs (about \$12,000), including architectural plans and an on-site office trailer, in preparation to develop the lots.
- After March 19, 1965 passed, Kasten declared the contract “null and void” due to expiration of the settlement date and refused to convey; Maple Ridge sued for specific performance.
- The equity court granted specific performance; Kasten appealed.

## Issues

1. Whether a land-sale contract that sets a settlement date but does not make time of the essence allows the seller to terminate for failure to close by the stated (or extended) date.
2. Whether the buyer was entitled to specific performance where delay occurred but the seller had not delivered the “finished” lots contemplated by the contract.

## Decision

- The Maryland Court of Appeals affirmed the decree of specific performance.
- The court held that time is generally not of the essence in contracts for the sale of land unless the contract terms, surrounding circumstances, or the parties’ conduct show a contrary intent.
- Because no time-is-of-the-essence intent was shown and the chancellor found the delay reasonable, Kasten could not treat the contract as terminated solely because the settlement date passed.
- The court also relied on Kasten’s incomplete performance of its obligation to provide “finished” lots in rejecting Kasten’s attempt to avoid the contract.

## Legal Principles

- In equity, a settlement date in a land-sale contract is ordinarily treated as formal rather than essential, and late performance may still be compelled.
- Time becomes essential only if that intent is clearly shown by (1) contract language, (2) the circumstances and purpose of the transaction, or (3) the parties’ conduct.
- A seller who has not performed material development obligations required for closing is not favored in equity when asserting strict timing to defeat specific performance.
- Specific performance is an available remedy for land transactions when delay is reasonable and damages are inadequate to substitute for the contracted-for property interests.

## Conclusion

The court held that, absent a clear indication that time was of the essence, the seller could not void the land-sale contract merely because the settlement date passed, and specific performance was properly ordered where the buyer’s delay was reasonable and the seller had not delivered the promised “finished” lots.


Kasten Constr. Co. v. Maple Ridge Constr. Co., 245 Md. 373, 226 A.2d 341 (Md. 1967)