The clause converts timing into a material term, permitting termination for any missed deadline. Without it, courts generally require performance within a reasonable time and treat modest delay as immaterial.
The clause may be waived by conduct accepting late performance.
Alternative Names:
Time of the Essence|TOE Clause
Why it Matters?
Waiver by conduct is the recurring defense, since a party that repeatedly accepted late performance without objection may have waived strict compliance and must give notice reinstating the requirement before terminating. That reinstatement notice is the step parties skip. Courts also decline to enforce the clause where the terminating party contributed to the delay, which limits its use against a counterparty the terminating party obstructed.
Frequently Confused with
Related terms
Frequently asked questions
Can the clause be waived?
What limits enforcement?
