Time of the essence

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Time of the essence
  • Consequence of a time of the essence clause
  • General rule—time not of the essence
  • Exceptions
  • Practical issues for the customer
  • Practical issues for the supplier
  • Statutory controls to protect supply of goods and services to customers subject to an insolvency procedure

Time of the essence

This Practice Note explains the purpose and significance of time of the essence clauses in commercial contracts. It explains the general rule and exceptions to the rule, and also looks at practical considerations for both the supplier and customer when considering time of the essence clauses in supply of goods or services contracts.

For a Precedent time of the essence clause together with detailed drafting notes, see Precedent: Time of the essence clause. See also: Drafting and negotiating a time of the essence clause—checklist.

For a discussion on time of the essence clauses in the context of:

  1. construction contracts, see Practice Note: Time of the essence—construction contracts

  2. rent reviews, see Practice Note: Rent review—when is time of the essence?

Consequence of a time of the essence clause

Where a contract provides that ‘time is of the essence’ in respect of the performance of an obligation, there is a contractual requirement for that obligation to be performed within the timescale specified. Generally, a failure to do so will result in a breach of contract which cannot be remedied (which may also attract damages for breach), and which will entitle the innocent party to terminate the contract, even where the failure to perform the obligation on time is minor.

Time of the essence clauses are often dealt with by the courts as examples of conditions or intermediate

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