Time of the Essence in Building Contracts

Abstract

This study examined the doctrine of time of the essence and how the UK courts interpret it in the sphere of building contracts. In a wide sample of cases heard before the UK courts, this study looked at the literal and legal meanings of time of the essence, especially when the phrase was incorporated into contracts, and when a party can utilize it if their counterpart fails to honor their contractual obligations. Time of the essence is a doctrine with a long and interesting history. Yet, the doctrine either tends to be briefly covered in leading authorities on construction law or gets diluted alongside the doctrines of repudiation and time at large, ultimately muffling the doctrine without any apposite explanation of its full effect in a construction law context. The background of this study rests on the need to enunciate the doctrine and expound on the viewpoints of UK legal practitioners regarding time as not being of the essence in building contracts. In practice, time tends to be essential only for particular contractual provisions, not the entire contract. Therefore, the aim of this study was to solely focus on the doctrine of time of the essence in building contracts, explaining the meaning of the doctrine, why it has a limited scope under building contracts, discerning situations in which its unwarranted stipulation under a building contract can lead to inadvertent outcomes, and showing why UK courts render time as not being of the essence when posed with the question of whether time is (or is not) of the essence in building contracts. The study methodology entailed electronically accessing the LexisNexis legal database to take out a chronological sample of cases heard before the UK courts that covered the doctrine of time of the essence in the context of building contracts. Because of a lack of journal articles focusing on this topic, the study also reviewed the leading legal authorities on construction and contract law. The study demonstrated that time is generally not of the essence in building contracts. In theory, time may be rendered as being of the essence in any contract in which it is expressly stipulated under the contract, implied, or when a notice is served rendering it as such. Yet, in the context of building contracts, the nature in which these conditions must be satisfied and the practical dynamic of building arrangements as a whole are very peculiar, making it highly unlikely for a court to find time to be of the essence. This study investigated the importance and cruciality of time clauses in building contracts. It is accepted that meeting contractual deadlines is fundamental for the continuity of a contract. However, this is not the case in building contracts. It is generally understood that time is not crucial for the continuity of building contracts; this has been mentioned by various leading legal authorities. Yet no thorough explanation has been made as to when, how, and why building contracts became unique among many, if not most, other types of contracts. Therefore, this study went back to early cases to chronologically expound on how time became less crucial for the continuity of building contracts. The study, provides different building-contract settings and demonstrates how the configuration of building contracts within or alongside other agreements may change the degree of time’s cruciality. This study will support project practitioners when they stipulate time clauses in their contracts, enabling them to have a well-rounded idea of what to expect and what to do should their time clauses be breached.