time is of the essence
Definition
This phrase in a contract means that the deadlines written into the agreement are strict and non-negotiable, not just rough targets. If you miss a deadline when this clause is present, the other party can legally cancel the contract and potentially sue you for damages, even if you were only a day late.
Example
A real estate purchase contract says 'time is of the essence' and requires you to close by March 15th, so if your financing falls through and you need until March 17th, the seller has the legal right to walk away and keep your deposit.
Watch Out
Never assume a deadline is flexible just because missing it seems like a minor inconvenience, because courts take this phrase seriously and will enforce it strictly.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.