Feb 25, 2020
Don't be Late for Your Date: The Importance of 'Time Is of the Essence' Clauses in Agreements of Purchase and Sale
By: Nathan Holloway and Barbara Green
Agreements of purchase and sale often contain a "time is of the essence" clause ("TIOTE") amongst the many boilerplate provisions. While no ordinary purchaser would be blamed for skipping over this provision and assuming it is meaningless, it is intended to hold parties to the deadlines in the agreement such as delivering deposits, waiver of conditions, and closing, and in some cases it provides a powerful tool for avoiding an agreement. As set out in the seminal 2005 decision of the ONSC in 1473587 Ontario Inc. v. Jackson, a failure by one party to perform by the time specified in the APS will generally be a material breach of the contract and the innocent party may rescind the contract.
Don't be Late for Your Date - The Importance of 'Time Is of the Essence' Clauses in Agreements of Purchase and Sale