Time is of the essence

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A magic incantation that one puts into a contract to designate that, whatever else might go down, a party's failure to comply with obligations within the stated timeframe is a fundamental breach justifying termination of contract, a plague upon your houses, apocalyptic horsemen on the ridge and so on.

Now at common law, time is — was — always of the essence. When any time is specified for the completion of an action, an action lies in breach if the action isn't performed by that time.

But as always, the dear old courts of chancery have to have their say. In equity, time is only fundamental to a contract if:

• Time is expressed to be “of the essence”;
• Otherwise the circumstances indicate the time limit must be complied with exactly;
• Where neither of the above applies, but one party has been unduly delaysome, the other can give notice requiring the contract to be performed within a reasonable time, therefore making time of the essence.

Thanks to the Law of Property Act 1925, Section 41, the rules at equity now apply in contract as well. Eheu.