Whether you are a lawyer, business owner or consultant, there are three temptations when writing a contract. They are:

  • Temptation 1: using jargon and/or legalese
  • Temptation 2: stealing with pride
  • Temptation 3: writing a new deal

Let’s start with temptation 1, typified by using jargon or phrases which you don’t really understand.  Before using a phrase, please make sure you know precisely what it means and the impact on you/your business partner. [read my post on force majeure].

‘Time is of the essence’

This phrase crops up in so many contracts – many of them without the writer or user really knowing what it means. Honestly, you are better off without it in many cases!

In 2013, following an auction of some property, the buyer and seller could not agree whether VAT was included. To try and move things along, the buyers served a special notice making time of the essence (a notice to complete). This turned the completion date into a ‘drop-dead date’ – and meeting that date became critical. Unfortunately, the buyers missed the new date. They had unintentionally made life harder for themselves as well as the sellers…

Time is rarely fundamental to a construction project. If your contract does say that completion is ‘of the essence’, then rather than paying compensation for being late, the buyer can refuse to accept the project once completed. As you can see, this phrase works better with products like perishable goods (which may putrefy) or event souvenirs. To find out more about how this jargon applies to construction contracts, see the Designing Buildings Wiki.

What should you do?

Use ordinary words in their ordinary meaning. If you want a right to cancel if the provider fails to meet a deadline, say so! If you want to be able to claim compensation if they are late, so that instead (and possibly set out delay damages too).

Case: Clarke Investments Ltd v Pacific Technologies [2013] EWCA Civ 750

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