Time of the essence
Contract Law

The time for performance in contracts is not of the essence unless it is expressly agreed by the parties or implied by the nature of the contract. The implication that time is of the essence will take place where the circumstances of the contract or the nature of the subject matter of contract require that the time of performance is imperative.

Furthermore, where a party has unduly delayed in the performance of a contract, the inncocent party may make time of the essence by providing notice.

When notice is served making time of the essence, the innocent party requires the party in breach to perform the contract within a reasonable time. Whether the period of notice is reasonable relies upon the outstanding obligations at the time of the notice.

A contract where time is of the essence requires performance of the party's obligations strictly in accordance with the dates or timeframes set out in the contract. The question in each case is to determine the particular clause of the contract where time is of the essence.

Serving a notice that time is of the essence may be a double edged sword, as the innocent party must be ready to perform their obligations under the contract if and when they fall due. Some cautions needs to be exercised prior to serving a notice, as the application of the law differs for contracts stating that time is of the essence, and where a notice is served in respect to a non-essential term of the contract.

In the event that the obligations are not performed within the contractual time period, the party providing notice (depending on the terms of the contract) will be entitled to terminate the contract and sue for damages for the outstanding obligations.