A study on essence of time with reference to Indian Contract Act.

1872
A common feature of construction contracts is a clause stating that "time is of the essence". In some
instances the clause will be inserted as boilerplate or from a precedent without discussion, while in
other cases one or both of the parties will expressly request the clause be inserted into the contract.
Either way, in the majority of cases little thought is given to the clause or it is often inserted without
a clear understanding of its meaning and effect. Contract drafters should take care as "time is of the
essence" clauses may not operate in the same manner in a construction contract as they do in other
situations, potentially leading to unexpected results during the project

1. Explicit stipulation of delivery times is practically universal in contracts. Examples include labour
contracts within firms, sub-contracting of parts of a larger project to other firms and procurement
contracts for large-scale projects such as weapons systems and infrastructure. In some of these
cases, a deadline is determined exogenously. For example, if a production process involves the use
of a perishable input, failing to meet a production deadline might mean the loss of the input in
question. Another example is a situation in which one of the parties is bound by a contract with a
third party. But in many situations, a deadline is imposed endogenously by one of the parties2

. "Time is the essence" is a term in contract law which indicates that the parties to the agreement
must perform by the time to which the parties have agreed. In the business matter generally time is
essence. The business matters depend upon the intention of the parties. Even where "a specific date
is mentioned of the completion for the contract" time schedule also very essential in the
construction contracts because construction is a commercial service .In a joint venture agreement,
one of the clauses was that the defendants were to perform certain formalities within 5 years, and
that, on failure to do so, the agreement was to become null and void. In the sale transactions time
factor is essential to performance. In the sale transaction the importance of time factor. Time is also
an essential part of any contract related to the land and Property. The parties may make time of the
essence either expressly in terms which unmistakably provide that they intended to do. Alternately,
making of time as the essence of a contract may be inferre. It is designed to protect buyers and
sellers alike, since if one party fails to meet a deadline the whole contract can be void. When the
promise is to be performed on a certain day, the promises duty in such a case is to perform the
contract during the usual business hours on such day. If the goods to be delivered are supplied after
the usual closing time, the buyer may reject them. When time is essence of the contract, non
performance of the contract in time would frustrate the purpose which the parties have in mind,
and, therefore, if in such a case, there is delay in the performance by one party, the other party has
a right to avoid the contract.

Scope of time and its importance in each valid contract

A common features of construction a valid contract stating that "Time is the essence of Contracts"

Time is very essential and importance aspects related to the each valid contract. It is the basic and
importance ingredients of valid contracts. But in the present scenario the time of valid contracts is
depend on the each cases and situation. In some cases the time is prescribe in the terms and
condition of a contract but in some cases the reasonable time is also play a very important role. The
reasonable time is depend on the nature of the contracts. If a contracts does not specify the time for
performance the law will imply that the parties intended that the obligations under the contract
should be performed within a reasonable time and the question What is a reasonable time is in
each particular case, a question fact.

If in any case when party to a contracts promise to do certain things at any time or before specified
period of time and fails to do the promise before the period of time or at a specified time , the
contracts become voidable if the intention of the party that the time is the essence of the contracts.

Contracts of all sorts specify date for performance various obligation and even an some absent of
some specify date there is some usually an implied term calling for performance within a reasonable
time. "Time is of the essence" clauses are used with regularity in other areas of the law, particularly
real estate and sale of goods where the courts generally apply a strict approach in enforcing this
clause.