⏰ “Time is of the Essence”: What the Phrase Means to Real Estate Contracts

Massachusetts’ courts are often flexible when it comes to the closing date and time stated in Purchase and Sale Agreements.

According to the Appellate Court, “performance on the date specified [in the P&S] is not ordinarily deemed to be of the essence, unless it is made so by express stipulation of the parties or is to be implied from the attendant circumstances.” Limpus v. Armstrong, 3 Mass. App. Ct. 19, 21 (1975).

For instance, suppose the agreement states that the closing will occur on “September 30, 2018 at 2 p.m. in the Registry of Deeds.”

However, one of the parties is unable to close until the follow day.

The party who was unprepared on the scheduled closing date will most likely not be in default of the P&S terms.

This all changes when the phrase “TIME IS OF THE ESSENCE” is added to P&S.

If such language is inserted into a contract, all dates and times must be strictly adhered to.

Massachusetts’ courts have held that even a 15 minute delay in meeting a contract’s deadline is sufficient to constitute a default when “time is of the essence.” Owen v. Kessler, 56 Mass. App. Ct. 466

Whether this language is added to your P&S or not often depends on where the sale is taking place.

In the central and eastern regions of Massachusetts “time is of the essence” is part of almost every Purchase and Sale Agreement.

But in western Massachusetts the phrase is rarely used.

If you have any questions about real estate law, please feel free to contact me at justin@jrmccarthy.com.