If you have ever read a contract when purchasing a house, commercial property, a car or otherwise, you will have come across the phrase, ‘time is of the essence’. It is an important term that features in just about every purchase contract that you might read and may be somewhat scary if you are unfamiliar with it. This short article will help you understand what it actually means and what it requires from you.
What Does it Mean?
In a contract, “time is of the essence” means the parties must complete a task within a specified time.
‘Time is of the essence’, is legal speak for urgency, typically requiring a person/party to a contract to make decisions or complete tasks before a certain deadline. In fact, it is actually a fundamental term in most purchase contracts, meaning that if it is breached, the entire agreement can be voided. The most common example of this is in the purchase of a residential property.
When buying a house, time is very much of the essence throughout the process. There a number of searches that a buyer needs to complete to satisfy themselves of the condition of the property before a certain date and, in obtaining finance for the purchase, this also needs to be done by a certain date. Otherwise, one party will have legal rights against the other, meaning that you may be sued; you may lose your deposit and often times the entire contract will be terminated. That is why when you engage good solicitors and conveyancers in purchasing a property, they will have a spreadsheet of critical dates for when certain conditions need to be completed to maintain your agreement being in the essence of time.
So next time you read a contract, pay close attention for the phrase ‘time is of the essence’ because it requires urgency in the process that could make or break the deal.