Time is of the Essence

25-Feb-2026

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Many contracts (including leases and offers to lease) contain a common “boilerplate” clause that simply states time is of the essence. Colloquially, this phrase is understood to mean that the applicable timelines are important or that the matter is urgent. 

However, ‘time is of the essence’ has a legal meaning with far greater consequence than is immediately evident from the language.

“Time is of the essence”  is a form of legal shorthand that means: if a party breaches a provision that requires performance by a certain day or time (no matter how trivial or minor the breach), the innocent party can terminate the contract!

In the absence of a “time is of the essence”  clause, a breach of contract (including failure to meet a deadline) entitles the innocent party to damages arising from the breach, but it does not permit the innocent party to terminate the contract. 

That is, however, unless the breach is “fundamental”, being a breach that deprives the innocent party of “substantially the whole benefit” of the contract. In the case of fundamental breach, the innocent party can terminate the contract (and sue for damages). 

The TOE clause effectively raises any breach of a time provision to the level of fundamental breach.

Accordingly, it appears that “time is of the essence”  clauses will rarely be utilized in commercial leases to permit termination by the landlord. 

This would not be true if there were no contractual default notice and cure period (such as in many forms of offer to lease) or in provinces where there is no statutorily imposed notice and cure period.