Time of the essence—construction contracts


Published by a ½Û×ÓÊÓƵ Construction expert
Practice notes

Time of the essence—construction contracts


Published by a ½Û×ÓÊÓƵ Construction expert

Practice notes
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What does Time of the essence mean?

Where time is 'of the essence' it means that the stated time for Completion of an obligation in a contract is a condition of the contract. Failing to comply can therefore allow the innocent party to terminate the contract and claim Damages. A construction contract is unlikely to include time of the essence provisions. Liquidated Damages, rather than termination, will ordinarily be the remedy for late completion of construction works.

Where time is not of the essence, in the absence of other contractual provisions relating to time (or if such provisions are inadequate), there will only be an obligation to perform the contract within a reasonable time. Time is then said to be 'at large' (see Practice Note: Time at large in construction contracts).

How does time become of the essence?

Express provision

Time will be of the essence if the parties have expressly stated in the contract that it is to be so. Simply setting a date for completion of the works without such an express provision (as is usual in

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Time of the essence definition
What does Time of the essence mean?

If time is of the essence for performance of an obligation under the agreement and the party responsible does not perform within that time, the other may terminate the Agreement and claim damages.

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