Time of the essence Definition

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GLOSSARY

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What does Time of the essence mean?

If time is of the essence for performance of an obligation under the agreement and the party responsible does not perform within that time, the other may terminate the Agreement and claim damages.

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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:•construction contracts, see Practice Note: Time of the essence—construction contracts•rent reviews, see Practice Note: A guide to rent review for property lawyers—When is time of the essence?Consequence of a time of the essence clauseWhere 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...

Terminating commercial contracts

Termination—contractual and common law rightsAs commercial lawyers, we are used to being instructed to advise in connection with the formation of a commercial relationship. Even if, like family lawyers drafting pre-nuptial agreements, we anticipate the consequences of the end of the relationship, it is only in more recent economic times that we are being asked more frequently how to break the relationship in the first place.It is important to remember that rights to terminate a contract may arise at common law (for example, in the event of repudiatory breach) and under the express terms of the contract. Where an agreement is silent as to contract termination, in the event of a dispute, the courts will apply common law principles. To avoid uncertainty, parties often include express contractual clauses which provide for the termination of a contract. In general, contractual rights to terminate are in addition to, and not in substitution for, common law rights. Absent express wording to the contrary, the ordinary assumption is that a contractual right to terminate...

Discover our 13 Practice Notes on Time of the essence

Contract cover sheet

Contract cover sheet [insert commercial sensitivity status eg ‘confidential’, ‘privileged and confidential’, ‘restricted’ etc] For internal use only: not to send externally This document is a summary of the main terms of the contract for quick reference only. Do not use it as a basis for making business or legal decisions without checking the terms of the underlying contract and consulting with [insert contract owner or relevant team eg Legal Department]. Internal overview Contract reference: [insert contract reference] Title of contract: [insert contract title] Date: [insert contract date] Description: [insert description of contract] Internal business customer and department: [insert name of internal business customer and department][insert contact details of internal business customer] Contract manager: [insert name of contract manager][insert contact details of contract manager] Contract value: [insert value of contract] Approval required: [yes OR no] [insert details of level of approval required] Approval obtained: [yes OR no] [insert details of obtained approval] Key review dates: [insert details of any key review dates] Contracting...

Settlement agreement for construction dispute (long form)

Settlement agreement for construction dispute (long form) This Settlement Agreement is made on [insert date] (the ‘Settlement Date’) between the following parties (each a ‘party’ and together the ‘parties’): Parties 1 [insert name of party A] a company incorporated in [England and Wales] whose company number is [insert company number] and whose registered office is at [insert registered office] ('[Name of party A]'); and 2 [insert name of party B] a company incorporated in [England and Wales] whose company number is [insert company number] and whose registered office is at [insert registered office] ('[Name of party B]'). Background (A) The parties entered into a construction contract dated [insert date] for the [insert description of works/project, eg ‘design and construction of a property known as Bloggs House'] (the ‘Contract’). (B) [The parties are engaged in a dispute[ regarding [insert details of the dispute, including material facts, potential causes of action and alleged losses—for guidance on issues to consider see the drafting notes] OR , full details of which are...

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