Time of the essence Definition

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.

View the related checklists about Time of the essence

Drafting and negotiating a time of the essence clause—checklist

Drafting and negotiating a time of the essence clause—checklist This Checklist outlines key provisions and issues for consideration when drafting and negotiating time of the essence clauses. For a Precedent time of the essence clause together with detailed drafting notes, see Precedent: Time of the essence clause. For information on time of the essence, exceptions to the general rule and practical issues to be considered by customers and suppliers, see Practice Note: Time of the essence. Legal Issues General comments What to watch out for Nature of the term: condition, innominate term or warranty Time will be of the essence where the parties expressly stipulate that time will be of the essence. If time is of the essence, a delay may give rise to the right to terminate the contract and a right to recover damages.In the absence of express wording, for time to be of the essence it must be a condition of the contract. If the provision dealing with time is construed as an innominate term or a warranty, it...

Drafting terms for the sale of goods—business to business—checklist

Drafting terms for the sale of goods—business to business—checklist This Checklist is for drafting terms and conditions for the sale of goods. It sets out the key considerations when drafting business-to-business (B2B) standard form terms and conditions or a contract for the sale of goods. It considers the legal, regulatory and practical issues around the sale and supply of goods and is drafted with a seller/supplier bias. For general guidance on contracts for the sale of goods, see Practice Notes: Contracts for the sale and supply of goods—business to business and Implied terms in contracts for goods and services. For general guidance on key terms in commercial contracts more broadly, see Practice Note: Key terms and conditions in commercial contracts. General considerations Speak to departmental representatives within the business to establish any concerns they have and any customer feedback that should be addressed in the terms. Understand how the goods will be provided and any back-end processes, eg for delivery or returns, which need to be reflected in the terms....

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 50 Practice Notes on Time of the essence

Share purchase agreement—pro-buyer—corporate seller—conditional—long form

Share purchase agreement—pro-buyer—corporate seller—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 [Insert name of selling corporate entity] incorporated in [England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Seller); 2 [Insert name of purchasing corporate entity] incorporated in England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Buyer), and 3 [Insert name of guarantor entity] incorporated in England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Guarantor) [(each of the Seller, the Buyer and the Guarantor being a Party and together the Seller, the Buyer and the Guarantor are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in [England and...

Share purchase agreement—pro-buyer—individual sellers—conditional—long form

Share purchase agreement—pro-buyer—individual sellers—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 The several persons whose names and addresses are set out in Schedule 1 (together the Sellers), and 2 [Insert name of purchasing corporate entity] incorporated in [England and Wales OR [Insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Buyer), [(each of the Sellers and the Buyer being a Party and together the Sellers and the Buyer are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in[ England and Wales OR [insert country of incorporation]]. Details of the Company are set out in Schedule 2, Part A. (B) The Sellers are the legal and beneficial owners of the Sale Shares (as defined below), being in aggregate the entire allotted and issued share capital of the Company. (C) The Sellers have agreed to sell and the...

Dive into our 41 Precedents related to Time of the essence

What circumstances amount to either a fundamental breach or breach of a fundamental condition of a contract, entitling a party to repudiate a contract? In what circumstances may a party argue that a contract has been frustrated?

What circumstances amount to either a fundamental breach or breach of a fundamental condition of a contract, entitling a party to repudiate a contract? In what circumstances may a party argue that a contract has been frustrated? Repudiatory breach The general rule is that a party to a contract must perform precisely what they agreed to do. Failure to do so constitutes a breach of contract. For further information, see Practice Note: Termination for breach of contract. A ‘repudiatory breach’ is a breach of contract that goes to the very core of the contract and gives the innocent party the right to treat the contract as being disregarded and entitling the innocent party to refuse to be bound by its terms. For further information, see Practice Note: Repudiation of contract. It is difficult to demonstrate circumstances which may amount to a repudiatory breach of contract, as what this will vary with each contract on the basis of the varying obligations. However, general principles to consider when deciding whether...

If a commercial lease contains provision for rent reviews in 2011, 2014 and 2017, but none of these have ever been implemented, can the landlord now implement the rent reviews back to 2011 and charge interest on the increased rent from 2011?

If a commercial lease contains provision for rent reviews in 2011, 2014 and 2017, but none of these have ever been implemented, can the landlord now implement the rent reviews back to 2011 and charge interest on the increased rent from 2011? Many (particularly older) forms of rent review clause require the landlord or tenant to take certain steps in connection with the rent review procedure set out in the lease (eg service of notices or counter-notices, or references to a third party). Often, the time for taking such a step will be defined or ascertainable and, if a deadline is missed, the question arises as to the consequences for that party in the context of the rent review. The answer, broadly, will turn on the well-known contractual issue: is time of the essence? If it is of the essence, the consequences may be severe; but if it is not, then the rent review machinery allows that party to take the necessary step out of time...

See the 28 Q&As about Time of the essence

Anatomy of a troubled digital twin project (Topalsson v RRMC)

TMT analysis: This judgment is useful reading for IT lawyers involved in negotiating contracts for the procurement of digital twin systems. The lessons of the case also apply to IT and software procurement more generally—when buying a bespoke software system, what can the customer put in the contract to ensure critical deliverables are delivered on time and to standard? When there are lots of quasi-contractual documents (implementation plans, timelines, etc), how best to ensure their contents are binding? How to handle uncertainties as to scope and timing, particularly if changes and delays occur? The judgment helpfully illustrates how these issues can go wrong and contains some important lessons for drafting IT contracts. Written by Chris Kemp, partner at Kemp IT Law LLP.

Energy weekly highlights—29 June 2023

This week's edition of Energy weekly highlights includes: A Video Analysis on the current state of the energy market, as we enter the second half of 2023, a News Analysis considering oil-related payments and UK corporation tax, the Department for Energy Security and Net Zero (DESNZ)’s response to its consultation on greenhouse gas removals (GGR) business models and Ofgem’s consultation on proposals to fund a transition to a Future System Operator.

Read the latest 33 News articles on Time of the essence

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