[CLC-Discussion] Time is of the Essence Clause

[Alex Barthet]

All:

I was hoping to tap the collective knowledge of the group.  I am looking for some direction on exceptions to a time is of the essence clause.

I have a settlement agreement that contains a time is of the essence clause.  There is no default, notice or grace period of any kind (they would not agree to it).  My client made 20 payments on the agreement.  The 21st payment was 1 day late due to a bank error (payments were via wire and the bank's wire processing facility was down that day).  The creditor accepted the payment and then 3 weeks later sought a judgment for the full claim amount (about $150,000 more than the reduced settlement amount).  We only had 2 more payments left on the agreement.

The law on this is not good.  I have looked into the waiver issues as well as claims against the bank.  That said, my focus now is if there are any exceptions you have seen to a time is of the essence clause because of issues out of a party's control (strikes, technology, natural disasters, ...).

Let me know and thanks in advance.

Regards,
Alex Barthet
Board Certified in Construction Law
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