Kevin Moses Paul
09 March 2021
Parties to a contract often include a statement that says "time is of the essence". Parties to a contract are sometimes surprised to learn that missing a contractual deadline does not always amount to a material breach of the contract.
In many types of contracts like construction, real estate sales, loans, or other non-goods contracts, courts often don't consider timing to be essential.
Courts determine that minor deviations from a contract's schedule aren't important enough to warrant damages or termination of the contract.
The timing of a loan contract may be very important indeed, if the lender's failure to fund the loan on time means that you can't buy a house or pursue a lucrative business opportunity. Due to this purpose, the parties to a contract/agreement as well as advocates began to use "time is of the essence" provisions in contracts.[Source - Nolo]
Therefore, time is very crucial in any contract or agreement. Time for completion is an important concept in contracts.
Thus, when a time limit is attached to an obligation under a contract, failure to complete that obligation within the time prescribed is usually a “material” breach of contract and the other party may be entitled to damages.
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Kevin M. Paul