Time of the essence (optional clause)

Time of the essence (optional clause)

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This document is an optional clause which can be inserted into a business sale agreement.

In business sale transactions, time is usually of the essence. The reasons for this include the uncertainty created to the market, to employees and to suppliers when a business is in flux. Therefore, it is sensible to include a clause stating that time is of the essence, and enabling either party to terminate the agreement if there is failure to by the other party to meet time commitments.

Using this precedent

This precedent clause can be used in a sale of business agreement. It can also be inserted into the “General” provisions in the separate precedents “Business sale agreement – sale of assets (short form)” and “Business sale agreement – sale of shares (short form)”.

When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.

This document has been authored for Lexis Nexis by Jeremy Kriewaldt, Partner, Atanaskovic Hartnell and Elise Margow, Principal, Legally Speaking.

This document is prepared with the assistance of Specialist Editor Murray Landis, Partner, K&L Gates.