The Essence of Time

The clause “time is of the essence” is treated as a boiler plate clause with little or no significance. If a Buyer delivers his deposit cheque past a deadline or if the closing takes place even 10 or minutes past the time for closing, most often the thinking is that this should not be a “big deal” – after all, the buyer has the intention and the good faith to complete the transaction and that it would be unjust or inequitable to insist on strict compliance with the deadline.

While some Courts have taken this approach and have allowed some “grace period” in these situations, overall the law is quite clear regarding “time of the essence clause” – if a buyer, for example is late in delivering his deposit cheque or if one of the parties is unable to meet a certain deadline under the Agreement, Courts will almost always enforce this clause to the detriment of the late party and allow the innocent part to terminate the agreement.

So please never underestimate the importance of this clause… and also remember to insert this clause when preparing any amendments to an Offer, so that time continues to remain of the essence.