Why “Time is of the Essence” Language Within a Contract Matters

If there is “time is of the essence” language in a contract, it means that any delays that occur on the project can be considered a breach of the contract. Therefore, the non-breaching party can terminate the contract. For example, if a subcontractor doesn’t complete their work on time the general contractor can end the contract, hire a new subcontractor to complete the work and sue the subcontractor.

If “time is of the essence” language does not exist within the contract, late work cannot be considered a breach of the contract. Further, even if the language does exist and late work occurs but the parties continue to work as is, the “time of the essence” provision can be waived.

“To preserve your “time is of the essence” provision, it is advisable that you grant extensions in writing expressly noting that the defaulting party is still in breach of the contract.  In that way, when you’ve had enough of the delays, you can still choose to terminate the contract.”

Read the entire article on The Lien Zone

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