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Time is made of the Essence of the Contract

Time is made of the essence of the contract by notice
Last updated: 21-Jun-2015

Per Lord Simon of Glaisdale in United Scientific Holdings Ltd v Burnley Borough Council; Cheapside Land Development Co Ltd and another v Messels Service Co [1977] 2 All ER 62 at 85:

Time is often spoken of as being ‘made of the essence of the contract by notice’--a concept which is reflected in the words ‘or have become’ in s 41 of the Law of Property Act 1925. Nevertheless, the phrase is misleading. In equity, and now in the fused system, performance had or has, in the absence of time being made of the essence, to be within a reasonable time. What is reasonable time is a question of fact to be determined in the light of all the circumstances. After the lapse of a reasonable time the promisee could and can give notice fixing a time for performance. This must itself be reasonable, notwithstanding that ex hypothesi a reasonable time for performance has already elapsed in the view of the promisee. The notice operates as evidence that the promisee considers that a reasonable time for performance has elapsed by the date of the notice and as evidence of the date by which the promisee now considers it reasonable for the contractual obligation to be performed. The promisor is put on notice of these matters. It is only in this sense that time is made of the essence of a contract in which it was previously non-essential. The promisee is really saying, ‘Unless you perform by such-and-such a date, I shall treat your failure as a repudiation of the contract’. The court may still find that the notice stipulating a date for performance was given prematurely, and/or that the date fixed for performance was unreasonably soon in all the circumstances. The fact that the parties have been in negotiation will be a weighty factor in the court’s determination.

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