Contract Glossary
Time Is of the Essence
Definition
A legal phrase that makes deadlines in a contract strictly enforceable. Without this clause, missing a deadline is a minor breach, annoying but not contract-ending. With it, missing a deadline is a material breach that can justify termination and damages. It transforms dates from 'targets' into hard commitments.
In Practice
You're buying commercial property with a closing date of April 15. The contract includes 'time is of the essence.' On April 16, your financing falls through and you ask for a one-week extension. The seller refuses and cancels the deal, keeping your earnest money deposit. Without the time-is-of-the-essence clause, a court might give you reasonable additional time to close. With it, the seller has the right to walk away the moment the deadline passes, and courts will enforce that.
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