Time of the Essence: What It Means in a Contract

When a contract says time is of the essence, meeting a particular deadline is an essential requirement. Missing it may give the other party the right to end the contract or claim damages, depending on the circumstances.

Lowdown

Not every contractual deadline has that effect. A late delivery or payment may still be a breach, but whether it allows the other party to end the contract depends on the agreement and the circumstances.

Why It Matters

Where a deadline is expressly made time of the essence, even a short delay can have serious consequences. Official contract terms sometimes use this wording where meeting a delivery date is critical.^[1]

Do not assume every date is automatically time of the essence. For example, the Sale of Goods Act 1979 says time of payment is not normally of the essence in contracts for the sale of goods unless the contract shows a different intention.^[2]

Before agreeing to the clause, check which deadlines it covers and whether you can realistically meet them, especially if you depend on another person or supplier first.

Our Conclusion

If a deadline is made time of the essence, take it seriously. Missing it may give the other party the right to end the contract or pursue other available remedies.

Sources

[1] NHS England, NHS Terms and Conditions for the Supply of Goods, Contract Version

[2] Sale of Goods Act 1979, section 10: Stipulations about time