Time Is of the Essence

Phrase that, when inserted in a contract, requires that all references to specific dates and times of day noted in the contract be interpreted exactly. In its absence, extreme delays might be legally acceptable.

A phrase that, when inserted in a Contract requires that all references to specific dates and times of day noted in the contract be interpreted exactly. In its absence extreme delays might be acceptable.
Example: A Sales Contract contains the clause time is of the essence. This statement reinforces the content of other clauses, such as the time provided to the buyer to arrange Financing and the date of Closing.

A phrase in a contract that means that performance by one party at or within the period specified in the contract is necessary to enable that party to require performance by the other party.

Failure to act within the time required constitutes a breach of the contract. The general rule is that time is not of the essence unless the contract expressly so provides. As a result, with respect to real estate transactions, the modern view is that time is not of the essence unless the parties have manifested such an intent. The same is generally true in construction contracts and in contracts relating to the manufacture of goods. When time is not of the essence, courts generally permit parties to perform their obligations within a reasonable time.