Feb 21, 2005
1473587 Ontario Inc. v. Jackson
The owners had sold the property twice. Loblaws, the first purchaser, mistakenly paid its deposit several days after the specified date in the sale agreement. That sale agreement made time “of the essence” in all respects. The owners relied on the late payment to terminate the Loblaws agreement and subsequently enter into a new sale agreement with our client.
Both Loblaws and our client sued to complete their respective sale agreements. Loblaws acknowledged the deposit was late, but argued that the owners had orally agreed to accept the late deposit and affirmed the deal. On a motion to determine the issue, the Court rejected Loblaws argument. The "time is of the essence" clause, rendered late payment of the deposit by Loblaws was a sufficiently major breach of the agreement which gave the owners the right to end their agreement with Loblaws.
“Time is of the essence”provisions are commonly found in sale agreements for land and are often contained in the "boilerplate". Where this clause is present, parties must be careful to ensure their strict compliance with the time limits or they risk losing the transaction.
For more information about this case or about obligations under sale agreements for land, please call Irving Marks (416)360-3329 or Barbara Green (416)360-3379.