“Time Is of the Essence” — Why This Clause Can Make or Break a Back-to-Back Closing

When a contract says time is of the essence, every date in the agreement is a hard, enforceable deadline.

• Miss the date, and you’re in breach.
• There’s no grace period, no “reasonable delay,” and no assumption that a short extension is okay unless the other party agrees in writing.

Without that phrase in the contract, most deadlines are treated as approximate, and a short delay is usually not a breach unless it causes real harm.

The Cross-State Chain Problem

Here’s where it gets dangerous:

You’re selling your Rhode Island home on November 1 and buying your new Massachusetts home on November 2.

• Your Massachusetts purchase agreement says time is of the essence for the closing date.
• Your Rhode Island sale agreement does not include the clause.

If your Rhode Island buyer delays the November 1 closing by a day or two, they’re probably not in breach under Rhode Island law. But now you don’t have the funds to close in Massachusetts on November 2 — and because Massachusetts treats the date as absolute, you are in breach on your purchase, even though the delay wasn’t your fault.

The Solution: Match the Rules

If one deal in a back-to-back closing is time is of the essence, every deal in that chain should be as well.

• Add the clause to the Rhode Island sale agreement.
• Make sure all parties understand that the date is fixed, not flexible.
• Coordinate with agents and attorneys to avoid surprise delays.

Why It Matters

In a single-state transaction, a short delay may just be an inconvenience. In a multi-state transaction, one day’s delay can set off a domino effect of breaches, penalties, or even total deal collapse.