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Both NABOR and FR/BAR use the phrase “time is of the essence”, but use it in different ways. What is this phrase supposed to mean, and how do courts interpret it?

When the contract includes this language, the parties are supposed to complete the particular obligation on time. In other words, not a day late, but on time. Timing of the contractual duty is material to the performance of the contract, allowing the other party to terminate the contract.

Interestingly, many states do not include this standard in any form. For example, standard provisions in a contract to purchase and sell real property in New York state, whether commercial or residential, usually do not subject the parties to “time being of the essence”. Instead, in order to require the parties’ performance of an obligation under a real estate contract in New York to be of the essence, the parties must either add specific language to such contract or subsequently declare time is of the essence by providing clear and unequivocal notice to all other parties to the contract. See Long Island Business News, publisher of The Suffolk Lawyer, the official publication of the Suffolk County Bar Association (June 2020 issue, Vol. 35, No. 6).

Under NABOR, “time is of the essence” as only to the Closing Date. If either party fails to close without some legal excuse, the other party, in theory, could terminate the contract. NABOR seems to allow the Seller to terminate the contract if the Buyer fails to close on time without legal justification.

What about the other NABOR obligations such as deposits, inspections, etc.?

Since NABOR is silent as to everything except the Closing Date, then the other party gets a reasonable time to perform. In re Mona Lisa at Celebration, LLC., 436 B.C. 179 (Bank. M.D. Fla. 2010). For example, if the second deposit is due this Friday, but the Buyer cannot wire the funds without physically being present at his financial advisor’s office until the following Tuesday, then the Buyer may reasonably argue for additional time. After all, he cannot wire the money any faster. The same analysis may apply to inspections, finance contingencies, and other parts of the NABOR contract.

Alternatively, FR/BAR dictates “time of the essence” for the entire contract. Using the facts in our prior example, our Buyer with the late second deposit may be out of luck.


Our appellate court in Jackson v Holmes, 307 So. 2d 470 (Fla. 2d DCA 1975) gives one example.

In this case, Mr. and Mrs. Jackson were selling 42 acres to Mr. and Mrs. Holmes. The contract included language that if the Buyers failed “to perform the contract within the time herein specified, time being of the essence of the agreement”, the deposit would be disposed of as specified therein. Typical legalese.

Because of certain issues, Mr. and Mrs. Holmes were unable to obtain loan approval certification, as required in the contract, until almost a month after the deadline.

The Jacksons’ lawyer notified the Holmes’ on November 28 that if certification was not received by December 1, the contract would be terminated. (Again, the contract called for notification by November 24). The Jacksons terminated the contract and tried to sell the property to someone else. They argued they needed the funds for another purchase.

Sounds like a common situation, doesn’t it?

What did the court do? In a nutshell, the court sided with the Holmes (Buyers).

Multiple factors were discussed in the opinion. Here are some of them.
The Jacksons admitted they already had access to information about the Holmes’ ability to close. They really did not need the certification;
The delay caused no hardship or damage to the Jacksons;
The failure to perform was not a “substantial” part of the contract. In particular, the court stated:

“…where the failure to perform is not substantial the non-performing party should not be deprived of his rights unless it appears from the contract that this was already contemplated by the parties.”

The court noted that a contract contains many promises “varying in amount and importance”. A “time is of the essence” clause does not apply equally to all of them.

The court went on to note that these clauses often are part of the printed form without any realization of its significance. The conduct of the parties may be used to interpret its effect.


The court believed that the time is of the essence language related to the ultimate closing, not the certification of loan approval.

  1. Practice Tip One: If your Seller wants “time is of the essence” as to a particular item, add the language to the contract. Give a reason, if possible. Show to any future judge that your customer is not relying on the pre-printed form. Show why the requirement is “substantial” and deserves more consideration. Consult with an attorney on this. Do not engage in the unauthorized practice of law!“The Buyer shall _________________________ no later than August 15, 2022 and this shall be considered “time is of the essence”. The Seller is relying on this deadline in order to _______________________________ and would be damaged significantly without this requirement.”
  2. Practice Tip 2: Be on time with all contractual promises. Arguing what is “reasonable” or “substantial” with another lawyer could result in lengthy, costly, and uncertain litigation.
  3. Practice Tip 3: You might need to educate your clients about these realities, especially clients with limited experience buying or selling real estate in Florida. If they are more accustomed to New York, for example, they may not prioritize deadlines such as the Closing Date, potentially leading to significant distrust amongst the parties or even losing the property altogether.

As you determine what is right for you and your clients, do not hesitate to reach out to our office for legal advice and to schedule your closing – we would be honored to help. We hope that you enjoyed these articles. If you should have any questions, please don’t hesitate to contact us directly!

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