FACTS: A buyer and seller entered into an Arizona REALTORS® Commercial Real Estate Purchase Contract (the “Contract”) on Thursday evening. After the Contract was signed by both parties, the buyer delivered the executed Contract and the earnest money to the Escrow Company on Friday. However, the escrow officer was out of town on Friday and therefore did not deposit the earnest money or open escrow on Friday.

By Monday, the buyer decided he wanted to cancel because he was in his “Due Diligence” period.

ISSUE: Did the buyer’s Due Diligence period begin on Friday when he delivered the Contract and earnest money?

ANSWER: Probably.

DISCUSSION:         

Pursuant to Section 4a of the Contract, the Due Diligence period begins after “Contract acceptance (‘Due Diligence Period’).”

Here, the Contract was fully signed on Thursday. Therefore, per Section 9j of the Contract the Due Diligence period began on Friday.