FACTS: A seller issued the buyer a Cure Period Notice (“Cure Notice”) citing Section 2b because the buyer had not signed loan documents three (3) days prior to the close of escrow date. Based upon a statement from the buyer’s lender, the seller was hopeful that the buyer would still be able to close and did not cancel after the three (3) days had expired in the cure period. The seller sent the buyer an addendum extending the close of escrow, which the buyer never signed.

Two (2) weeks later, the buyer had still not closed. The seller wants to cancel without providing a new Cure Notice believing the original Cure Notice issued two (2) weeks ago is still a valid notice.

ISSUE: Does the seller have to issue a new Cure Notice?

ANSWER: Probably.

DISCUSSION:

A “party to a contract having the option or right, because of a breach thereof by the other party, to terminate it, but who stands by and permits the other party to go ahead doing the things required of him, will be treated as having waived the breach …” Pima Farms Co. v. Fowler, 32 Ariz. 331, 337-338, 258 P. 256, 258 (1927).

Here, the seller likely waived the buyer’s breach when the seller failed to cancel after the first Cure Notice, and then signed an addendum to extend the close of escrow.