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Should You Include a Time Is of the Essence Clause in Your Real Estate Contract?

Last updated 03/19/2024 by

Alani Asis

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In a real estate contract, a time is of the essence clause is a provision that legally requires a party to complete a task within a designated time frame. Examples of deadlines that may be subject to a time is of the essence clause include delivering required documents, accepting or rejecting an offer, conducting a home inspection, and closing on a home sale.
Whether you’re returning a book to the library or submitting a project for work, deadlines are a common reality of life. That said, some deadlines are more important than others. When you’re buying or selling a home, for example, time restraints are crucial to ensure every step of the home-buying process runs as smoothly as possible.
Establishing deadlines is a great way to keep all parties accountable. That’s why many real estate contracts include what’s known as a “time is of the essence clause.” Binding all parties to this time-oriented provision increases the likelihood that the entire home-buying process will remain on schedule. However, missing a deadline laid out in a contract could lead to serious legal repercussions.
To help you decide whether it’s worth including this provision in your contract, let’s go over how a time is of the essence clause works and what happens if one party breaches it during a transaction.

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What is a time is of the essence clause in a real estate contract?

“Time is of the essence” is a legal term that indicates the need for timely completion. You’ll find this clause included in contracts across multiple different industries as a legal measure to ensure all parties adhere to given deadlines. In real estate contracts, a time is of the essence clause requires both parties involved in the home-buying process to meet contractual obligations within a specified time frame.
In a real estate transaction, all parties are expected to adhere to strict deadlines even if a time is of the essence clause isn’t included in the purchase agreement. These deadlines include delivering documents, employing termination methods, and agreeing on a closing date.
However, if the buyer or seller does decide to include a time is of the essence clause in the purchase agreement, then the other party is now legally obliged to fulfill the task by the assigned date.

Examples of time is of the essence clauses

The following are some instances in which a time is of the essence clause might apply:
  • One party’s real estate agent must submit an offer to the other party.
  • The seller must accept or reject an offer.
  • The seller must send a list of disclosures to the buyer upon acceptance of their offer.
  • The buyer must schedule a home inspection.
  • Both parties must complete an attorney review and agree on the preliminary terms.
  • Lenders must provide funds for the mortgage.
  • Both parties must agree on a closing date.

How does a time is of the essence clause work?

Time is of the essence clauses are intended to hold all parties accountable throughout a real estate transaction. As long as all parties comply with the deadlines laid out in a contract, the home sale can be completed in a timely manner.

Pro Tip

Buyer beware: a seller may insist on a particularly stringent closing date in order to secure a loan more quickly. When you’re buying a home, it may be worth working with a real estate attorney to ensure all deadlines laid out in your contract are realistic.

All parties must be aware of the clause

Deadlines on their own are not automatically binding — in other words, you cannot seek legal recourse simply because the other party missed the target date you verbally set for them. According to Zachary Soccio-Marandola, a real estate lawyer,
“Without a time is of the essence clause, a missed deadline may not give the innocent party the right to damages or termination. Instead, a court would look to the circumstances surrounding the breach and whether any damages were actually suffered. In some situations and jurisdictions, time is of the essence and can be implied from the nature of the deadline.”
Crucially, one party must disclose their intent to use the clause to the other party through a time is of the essence letter. All parties must then consent to the terms and sign the contract for the agreement to be legally enforceable.

What is included in a time is of the essence letter?

A time is of the essence letter must disclose the expected completion date and the repercussions of failure to complete that task. You must also give the other party reasonable postponement, which allows them leeway for extenuating circumstances that may result in a delay.
Above all, your time is of the essence clause must be detailed and fair. If not, a court is unlikely to consider an infraction of the clause to be a material breach of contract, which means you cannot rightfully seek remedies for the missed deadline. As Soccio-Marandola explains,
“When drafting a time is of the essence clause, details are the key to enforceability. This means that a well-drafted clause will include the date and time when performance is expected, along with pre-determined consequences if the party fails to perform. This removes any ambiguity or need for interpretation from a court.”

Pro Tip

According to Elina Yuabov, managing partner at Yuabov Law Group, if a seller insists on including a time is of the essence clause, you as the buyer can request a cure period in the purchase contract. That way, if you miss a deadline, the seller will have to provide written notice and offer an extension as negotiated.

What happens if the other party fails to meet a time is of the essence deadline?

If either party fails to complete a task by a certain date defined in a time is of the essence clause, the breaching party may face legal ramifications.
According to Yuabov, a timely clause violation may allow the non-breaching party “the ability to terminate the agreement, retain the purchaser’s deposit, in whole or in part, as liquidated damages, be entitled to various cost reimbursements, or specific performance.”
For instance, if the buyer fails to complete a home inspection on time and consequently pushes back the closing date, the seller may seek compensation for damages due to the missed closing date or terminate the contract altogether.

Should I include a time is of the essence clause in my real estate contract?

Adding a time is of the essence clause to your real estate contract can be a good way to ensure all parties stay on top of their deadlines, which can reduce the risk of delays and make for a smooth and efficient home sale. It can also serve to protect the parties involved in the transaction, such as by ensuring a seller quickly rectifies any issues found during a home inspection or deterring a buyer from delaying a sale and causing damages to the seller.
That said, excessive use of legalese may dissuade the other party from entering into a contract in the first place. You may end up losing out on a deal if a buyer or seller doesn’t want to risk facing legal repercussions for missing a deadline, so consider using this legal tool sparingly, such as solely for tasks that require the utmost urgency.


What does the phrase “of the essence” mean?

The phrase “of the essence ” means “of the utmost importance.”

How does a time is of the essence clause affect construction contracts?

A time is of the essence clause in a construction contract will typically outline the time frame in which construction on a home should be completed. If a contractor fails to complete the construction within that time frame, you may be able to file a lawsuit against them and require them to shoulder any financial losses caused by the missed deadline.

Why is a time is of the essence clause important?

A time is of the essence clause is essential because it ensures that all parties meet their deadlines in a timely fashion. According to Soccio-Marandola, “In real estate agreements, a time is of the essence clause is highly recommended. Deadlines such as the closing date or condition dates require the coordination of other services, meaning that any late performance can cause real inconvenience and monetary damages.”

What does it mean when time is of the essence in real estate contracts?

If a contract has a time is of the essence clause, that means the outlined task must be completed by a specific date. If the party doesn’t fulfill the task by that target date, they may face legal consequences from the non-breaching party.

Key Takeaways

  • A time is of the essence clause is a stipulation in a real estate contract that the parties will complete their given tasks within an agreed-upon timeline.
  • Examples of tasks that may be outlined in time is of the essence clauses include acceptance or rejection of offers, home inspections, and agreement on a closing date.
  • In order for a time is of the essence clause to be enforceable in court, one party must provide the other with a clearly detailed letter outlining a reasonable time frame and the consequences of a breach of contract, which must then be signed by both parties.
  • If one party misses a deadline that constitutes a breach of a time is of the essence clause, they may face serious legal repercussions.
  • Before signing a contract with a time is of the essence clause, it’s a good idea to make sure that all terms and timelines detailed in the contract are reasonable.
Whether you’re buying or selling a home, you should have a team of real estate experts to help you navigate the home-buying process all the way up to closing day. If you’re not sure whether you should have a time is of the essence clause in your contract, the best course of action is to consult with a reliable real estate lawyer.
Check out SuperMoney’s in-depth guide on how a real estate attorney can help you, and use the American Bar Association’s directoryto find a good attorney in your area. And once you’re ready to purchase a home, be sure to check out our top picks for the best mortgage lenders to find the right home loan for your needs!

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