What does “time is of the essence” mean in a construction contract?

A brief introduction from a project/contract management perspective (not “legal”), as I am a chartered civil engineer, certified in cost engineering.

“Time is of the essence” means that “time” is a key factor in performing the duties described in the contract. Essentially the statement means that there is the need for timely completion of the project (an impressive example of “timely completion” is the bridge built by Julius Caeaar across Rheno in 55 BC). This situation typically regards all the projects, and the “project completion date” is clearly stated and it is a contractual obligation. In complex and/or large project, there might be also some intermediate completion dates (intermediate milestones) which fix the timely road-map for project execution.

Lacking in achieving the contractual intermediate milestones can be associated to penalties; poor project progress against the planned “rate”, can generate difficult situations, which might evolve to breach of contract, with “liquidated damages”

When “time is of essence”, the contract requires articulated planning and scheduling methods to be adopted by the contractor, in order to guarantee an effective project progress measurement and delay assessment.

Assessing delay and the “causes” of delay on a complex project cannot be an easy task: “delay analysis” is a branch of project planning and it involves some interesting topics like “concurrent schedule delay” and forensic planning.

In this category of my blog “short notes” I collect some of my answers in Quora regarding project and contract management, or some questions received during my training courses.