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

Published by Massimoluigi Casinelli on

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.

Categories: Short notes

Massimoluigi Casinelli

I am a chartered civil engineer and certified CCP (cost engineering and total cost management) at AACE International, with thirty years of experience in project management of the construction sector. I deliver expert planning, programme management and project controls on multibillions-Euro infrastructure programmes, including highways and railways, metro, air terminals and complex buildings (commercial, residential, schools), with some experience in oil & gas and power. I worked in advanced contexts of project management (from matrix organizations of EPC contractors to large employers organized to manage complex capital projects), by undertaking various roles in the field of project management / controls and contract management; this diverse range of experiences allowed me to gain knowledge on the various components of project controls (schedule, cost estimating, budgeting and cost control, progress and performance measurement, risk and claim management). I am an Italian citizen, currently in Italy.

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