1. A contract clause stating that 'time is of the essence' means:
Answer & explanation
Answer: D. 'Time is of the essence' makes performance by the stated dates essential; missing a deadline can be a breach.
contracts
time is of the essence
A contract clause stating that the dates and deadlines in the agreement must be met exactly. If a party fails to perform by the specified date, they may be in breach, and the other party may have remedies such as canceling the contract. Without this language, courts may allow a reasonable delay. Its effect can vary by state and contract wording.
- Exam tip
- This clause makes deadlines strict. A missed closing date under a time-is-of-the-essence clause is a breach, not a minor delay.
- Example
- A contract says closing must occur by June 1 and time is of the essence; the buyer's lender is not ready, so the seller may terminate.
Related terms & state variants
Sources
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Last verified: 2026-10-23