When you enter into an agreement with someone to do some work for you the time to complete that work will not be ‘of the essence’ unless this is specified. The work must just be carried out within a reasonable time and what is a reasonable time can be open to interpretation. If the contract does not include a clause making time of the essence and specifying when the work has to be carried out a court is likely to consider that the timing was not considered important and that any delay does not amount to a fundamental breach which would allow you to terminate the contract and claim damages. It is for this reason that where it is essential that a contract is carried out by a certain date, a clause making time of the essence is included.
If contracts for such as building work, home improvements or the delivery of goods purchased are not performed as promised, you can be caused major inconvenience. You may have stripped out your old kitchen in readiness for a new one to be fitted and the supplier does not turn up when promised. For you with hungry children that is a disaster, but for the supplier a few days’ delay is unfortunate but reasonable as they were held up on another job. Finishing repairs to your car before going on holiday will be critical for you, but not for the garage who will consider a few days delay reasonable if there was a problem with parts.
Including time is of the essence
Including a ‘time is of the essence’ clause as a term in a contract will do just that. It makes a party’s failure to comply a material breach. You will be able to consider the contract terminated and claim damages for loss resulting from the breach. As there is a common law duty to mitigate the loss, you should where appropriate find somebody else to complete the contract. Any difference in price can be claimed from the supplier who breached the contract by failing to deliver on time.
Delivery times are always considered important by the courts whether or not a time is of the essence clause is included in the contract. However, terms dealing with the time for payment are not so as any late payments can usually be dealt with by the payment of interest.
Without a time is of the essence clause in a contract, the courts will usually find that the timing was not considered essential and minor deviations do not constitute a breach and are not actionable. When problems develop therefore with a supplier over delay in delivery or providing a service it is essential to make time of the essence. A simple letter is all that is required. Write saying that you are making time of the essence in your contract and give a date for compliance after which you will consider the contract at an end, find another supplier and claim damages.