There’s no legal requirement that a purchase agreement has to contain an expiration date, but most of them do. Some contracts also include a renewal clause, to provide a little breathing room in case contingencies take longer to resolve than expected.
However, sometimes a purchase agreement does expire before closing can occur, for a variety of reasons. Perhaps the lender missed the closing date, for example, compromising your financing. Once the purchase agreement expires, there is no longer a binding contract giving you the right to purchase the property. You and the seller are no longer engaged in an active contract with each other — period. Does that mean the sale is dead? Not necessarily.
The typical remedy is to try and extend the closing date. If the lender hasn’t approved your financing by the closing date, the seller might agree to push the date back to allow more time for your loan to go through — but they don’t have to. If the loan isn’t approved, the sale will then fall through completely.
Any delay in meeting the closing schedule can have serious consequences. In a worst-case scenario where those delays end up pushing the contract past its expiration, you could lose your earnest money (if you’re the buyer) or be sued (if you’re the seller).
That’s why it’s so important to build sound contingency clauses into the purchase agreement — and why the expiration date should always be clearly defined before the contract is signed.