In the Court of Appeal case of Buckland v Farmer and Moody [1979] Buckley LJ said of breaches of contract: “If the party who is in the right allows the defaulting party to try to remedy his default after an essential date has passed, he cannot then call the bargain off without first warning the defaulting party by fixing a fresh limit, reasonable in the circumstances.”
He was citing Goulding J in the old case of Luck v White.
Therefore, in such circumstances the claimant could not simply pull the plug on the contract without fixing a new date that was reasonable in the circumstances.
In the High Court case of Hakimzay Ltd v Swailes [2015] the buyer had bought with vacant possession and served a notice to complete when this could not be provided.
This made time of the essence to complete by a certain date which was not complied with.
The buyer came up with proposals to allow the seller more time but wanted £10,000 off the price as compensation for having its money tied up unproductively with its solicitor.
But now having got the last tenant out, the seller sought to cancel the contract.
The court said the seller could not now just turn round and say, “I require you to complete forthwith. If you cannot, I shall terminate on account of your repudiatory breach, because during this continuing period after expiration of the notice to complete time remains of the essence.”
So the seller was not entitled to serve his notice of rescission of the contract, which was accordingly ineffective to bring the contract to an end.
This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.
Original article: Extension beyond deadline: time no longer of essence.