This creates an added level of certainty and clarity about how both parties will interact with each other during a transaction. If one person fails to meet a deadline set out in a contract with a time is of the essence clause, they could potentially forfeit their rights under the contract or lose certain legal benefits that they were entitled to if they met all of the deadlines for completing it. What Are The Benefits Of Using A “Time Is Of The Essence” Clause? You may also see this type of language used during negotiations when two people are finalizing a contract. For example, if you are working with an attorney to file papers with the court, you could use a time is of the essence clause because there are strict rules about filing documents by their due date (this deadline cannot be extended). The clause would ensure that both parties meet deadlines for completing this transaction, which may help to avoid any potential disagreements or conflicts down the line.Īnother example where it might be useful to include a time is of the essence clause is when one party needs immediate action from another. One example where this type of clause would make sense is if you were purchasing a new home and required the seller to complete certain work on the house for your family before you moved in. What Are Some Examples Of Where You Might See A “Time Is Of The Essence” Clause? A court will look at the contract to see if that’s what both parties actually intended. However, when a time is of the essence clause is used as a condition for payment, courts will generally allow for a party to remedy or fix the problem before voiding a contract and awarding damages.Ī time of the essence clause can be strictly enforced however, the clause has to be very specific and precise with no ambiguity. When someone has a time is of the essence provision in place, it’s generally because completion of the contract is time-sensitive, and one of the parties to the contract needs more control over the obligations due to potential problems that might arise if a transaction takes longer than expected. Why Would Someone Use A “Time Is Of The Essence” Clause?
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