Time is of the essence

Key Takeaways

• A time is of the essence clause turns every stated date and time in the contract into a strict deadline rather than a target.
• Missing a deadline under that clause is a material breach, so the other side may treat the agreement as broken instead of waiting for late performance.
• The clause appears in most real estate contracts, so a licensee tracks contingency and closing dates from the moment of mutual acceptance.
• Many contract provisions treat silence as agreement with a proposal or as a waiver of the options in that clause, so a missed response deadline can settle a term against the client.

What It Means

Time is of the essence is a short clause with a large effect. When a contract includes it, the times and dates written into the agreement become vital and mandatory rather than approximate. A party who performs late has not simply been slow. That party has breached, and the other side may treat the contract as broken rather than allow a few extra days.

Without the clause, a court may accept performance within a reasonable time after the stated date, particularly where the delay caused no real harm. With it, the parties have agreed up front that the calendar itself is a material term, and a missed date is a Breach of that term. Real estate agreements carry the clause because so much is chained together. Inspection, title review, financing, and closing each depend on the step before, so one slipped date can pull the rest of the schedule apart.

Course material pairs the clause with a second warning worth memorizing. Many contract provisions state that a party who does not respond by the deadline is treated as agreeing to the proposal, or as waiving the options in that clause. Put the two ideas together and a missed date is not only a risk of breach. It can decide a term of the deal against whichever client went quiet.

How It Works in Washington

No Washington statute creates the clause. It comes from the contract itself, and the standard forms used across the state carry it. What Washington law supplies is the framework around a missed date.

Start with the licensee's own duty. RCW 18.86.030(1)(c) requires a broker to present all written offers, written notices, and other written communications to and from either party in a timely manner, whether or not the property is already subject to a contract for sale. Holding a signed addendum overnight is a licensing problem stacked on top of a contract problem. RCW 18.86.030(1)(a) adds the duty to exercise reasonable skill and care, which is the hook a client reaches for when a broker lets a Contingency deadline slide past unnoticed.

Counting days matters too. RCW 1.12.040 sets how time is computed under Washington statutes: exclude the first day, include the last, and exclude the last day when it falls on a holiday, Saturday, or Sunday. Contract forms normally spell out their own counting method, so read the Purchase And Sale Agreement rather than assuming the statutory rule governs the deal. And a missed date does not evaporate when the transaction dies. RCW 4.16.040 allows six years to bring an action on a contract in writing, so the breach stays actionable long after the parties have moved on.

Example

Elena and Tomas go under contract on a Renton house at $740,000, with Mutual Acceptance on June 3. The form states that time is of the essence. The inspection contingency runs 10 days, so their response is due June 13, and the financing contingency runs 30 days with closing set for July 15. The inspection on June 11 finds a failing roof. Their broker delivers a written request for a $9,000 credit on June 12, one day inside the window. The sellers counter at $5,000 on June 13 and the buyers sign. Then the appraisal lands at $718,000, the lender re-underwrites, and the file needs four more days. Because time is of the essence, the buyers cannot simply fund late on July 15. On July 11 both sides sign an addendum moving closing to July 19, and the new date replaces the old one. Had July 15 come and gone with no signed extension, the buyers would have been in default and the sellers could have exercised the remedies the contract gives them for a buyer's breach.

Common Mistakes and Exam Traps

• Without a time is of the essence clause a court may allow performance within a reasonable time, and with the clause the stated date is the deadline.
• The clause makes a missed date a material breach rather than a minor or curable delay, which is the distinction most exam questions are built around.
• A deadline changes only when both parties agree, normally through a signed addendum, so one side cannot move a date on its own.
• The clause binds both sides, so a seller who delivers documents late is exposed the same way a late buyer is.