South-Western Legal Studies in Business

Bargained For "Time Is of Essence" Clause Will Be Enforced
Description Appeals court held that when the parties to a contract bargain for a specific time deadline to be met in fulfilling the creation of a contract, the deadline is a condition subsequent that must be met for the contract to be enforceable. Missing the deadline releases parties from the contract.
Topic Contracts
Key Words Condition Subsequent; Time Deadline; Rejection
C A S E   S U M M A R Y
Facts Owen and Wardle both wished to buy a house owned by Kessler. A standard real estate offer to purchase form was prepared by Wardle, through his agent, stating that "time is of the essence" and the deal must be completed by 11 A.M. on September 26. Owen, learning that Wardle had made an offer, submitted a back-up purchase offer for the same price offered by Wardle in case Wardle's deal fell through. Wardle's agent did not deliver the completed contract to Kessler until 11:20 A.M. on September 26, so Kessler accepted the Owen offer. Wardle then sued Kessler for specific performance; Owen intervened in the suit. The trial court found for Wardle. Owen appealed.
Decision

Reversed. A deadline in a land sale agreement is a condition subsequent. If the condition is not met, then the parties' obligations to each other are extinguished. Parties will be held to the deadlines they impose upon themselves when they state in writing that time is of the essence. Once the time deadline had passed, Kessler was released from any obligation to Wardle. That is a lawful enforcement of a bargained-for "time is of the essence" clause. Owen's offer to Kessler could then be accepted.

Citation Owen v. Kessler, 778 N.E.2d 953 (App. Ct., Mass., 2002)

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