Time Is of the Essence
A contract provision stating that deadlines in the agreement are strict and that failure to meet them is a material breach. Missing a deadline can give the other party the right to cancel the contract or claim damages.
Detailed Explanation
When a contract says "time is of the essence," it means that every deadline in the agreement — closing date, contingency deadlines, payment schedules — must be met exactly as written. Missing a deadline by even one day can be treated as a breach.
In builder contracts, this provision typically benefits the builder more than the buyer. If you miss your closing date by a day, the builder may invoke this clause to charge penalties, keep your deposit, or cancel the contract.
Without a time-is-of-the-essence clause, courts generally allow a "reasonable" amount of time to meet deadlines. With the clause, there is no flexibility.
In Your Contract
Look for the exact phrase "time is of the essence" or language stating that "all dates and deadlines are material terms of this Agreement." It typically appears in the general provisions section.
Key Points
- 1Makes all deadlines strict — missing by even one day can be a breach.
- 2Typically favors the builder more than the buyer.
- 3Applies to closing dates, contingency deadlines, and payment schedules.
- 4Without this clause, courts may allow reasonable flexibility on timing.
- 5Understand every deadline in your contract if this clause is present.
Related Content
Have a new construction contract? Scan it for $49 at fineprint.homes
Scan Your Contract