Secondary Blocks

Time is of the essence

This guide explains the different parts that make up a time is of the essence block.


Time is of the essence

“Time is of the essence” is a legal phrase often included in a contracts, such as a Professional Services Agreements (PSA). When this provision is included, it emphasizes that the timing specified for the performance of obligations is a critical part of the contract. Failure to meet the agreed-upon timelines can be considered a material breach of the contract, which might give the aggrieved party the right to claim damages or even terminate the agreement.

“Time is of the essence” can apply to various obligations of the service provider. For example, it might apply to the delivery of certain project milestones or all obligations under the agreement.

When should a “time is of the essence” clause be included? It depends on the specifics of the project and the needs of the parties involved. 

  1. Strict adherence to timelines is critical: In projects where delays can cause significant disruption or financial loss, it might be essential to emphasize the importance of timelines. For instance, if a tech company is developing software for a retail business to use during the holiday shopping season, it would be crucial for the software to be ready on time.

  2. There are interconnected tasks or dependencies: If a project involves multiple parties or tasks that depend on each other, meeting timelines can be crucial to avoid a domino effect of delays. For example, if a service provider is implementing a new IT system and another provider is scheduled to train the staff on that system, any delay in the implementation could also delay the training.

It’s important to note that “time is of the essence” is a stringent requirement and should not be included lightly. If a party fails to meet a timeline, even by a small margin, they could be in material breach of contract. Both parties should understand the implications of this clause, and if included, it’s also crucial to ensure that any timelines in the contract are realistic and achievable.



This part confirms the service provider’s understanding and acceptance that meeting the specified timelines is crucial to the agreement. It serves to remove any ambiguity about the importance of the deadlines and the critical consequences of failing to meet them. The acknowledgment ensures that the service provider can’t claim later they were unaware of the significance of the timelines.

Material breach

This part provides that the failure to meet a timeline will constitute a “material breach” of the agreement. A material breach is a serious violation that goes to the heart of the contract, one so significant it relieves the injured party of their own contractual obligations and may entitle them to legal remedies which include termination of the agreement.


This part lays out the potential remedies that the client may pursue if the service provider fails to meet a deadline. These remedies could include terminating the contract, which would end the agreement and relieve the client of any further obligations. The client may also demand a refund of any payments made to the service provider, potentially even if the service provider has partially completed the work. The specific remedies available will depend on the terms of the contract and applicable law.

Failure to exercise rights

This part ensures that if the client chooses not to enforce the “time is of the essence” clause immediately upon a missed deadline, they’re not giving up their right to enforce it later. In other words, even if the client is lenient initially, they can still choose to exercise their contractual rights at a later time without being seen to have waived them.

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