We lawyers at McGrath and Spielberger, PLLC deal with contracts every day. Most of those legal agreements have at least one deadline, while some contracts have numerous deadlines. A related article by us discusses types of contractual deadlines.
An important aspect of contractual deadlines is whether “time is of the essence”. Any deadlines, dates, time periods, etc. in a contract are more likely to be enforced very strictly if the agreement states that “time is of the essence” regarding same.
Let’s suppose a Service Provider has not completed the contractually-obligated Services within the required time frame, and let’s compare and contrast these 2 different versions of the deadline in the business contract.
(Version A) Service Provider shall complete the Services no later than 90 days after Company provides the Data.
vs.
(Version B) Service Provider shall complete the Services no later than 90 days after Company provides the Data, with time being of the essence.
The entire circumstances are always taken into account when applying the law or a legal agreement to the facts of a particular real world situation. However, generally, Version A is more likely to allow Service Provider a bit of leeway whilst Version B increases the chances that Service Provider would be deemed to be in “material breach” of contract for not meeting the deadline.
On the one hand, it seems logical that any deadline in a legally binding agreement should be considered to be a definitive deadline vs. a “target”. However, courts do (sometimes unofficially) take into account that “stuff happens” in real life and having a contract in place does not always mean a party is “punished” for lack of perfect compliance.
The more important the deadline, the more important it is for the party who needs the deadline (or benefits from it) to have “time is of the essence” in the contract for that deadline.
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