In New Jersey, the timing of a closing or other happening is generally not a material condition to the purchase and sale of real property. In other words, if the timing of a transaction is important, you have to make Time of the Essence. New Jersey courts recognize that when the buyer and seller pick a closing date early on, the date is merely an estimate, and that both parties may. In New Jersey real estate contracts, many buyers and sellers assume the closing date is fixed and final. In most cases, it is not. Unless the contract makes time essential, New Jersey courts generally treat the scheduled closing date as an estimate rather than a drop-dead deadline. That is why lawyers so often talk about making Time of the Essence. Under New Jersey law, time can become essential either because the contract expressly says so or because one party later serves a proper notice that sets a reasonable final deadline, requiring additional time to prepare for closing, satisfy contingencies, and get everything in order.

What Does Time of the Essence Mean

So, what does Time of the Essence mean? It means the date and time for performance becomes a material term of the contract. If the buyer or seller fails to perform on that deadline, the failure may become a material breach. In a residential sale, that usually means one side is ready, willing, and able to close, while the other side does not show up, cannot deliver title, cannot fund, or otherwise cannot perform on the stated deadline. When time is properly made essential, even a short delay can carry serious consequences

Understanding the Stakes

This issue matters because standard New Jersey practice often treats the original closing date as flexible. Delays happen. Mortgage underwriting takes longer than expected. Title issues surface. Certificates of occupancy and smoke certifications lag. A seller may still be clearing out the property. A buyer may still be waiting for lender conditions. Without a valid Time of the Essence clause or notice, one missed closing date does not automatically kill the deal. Instead, the law usually allows performance within a reasonable time.

The material conditions of the transaction are generally the price, the property, and the documents required to convey title. This is true for both residential and commercial transactions. If a contract provides that the parties are to close on May 15th, and the buyer delays closing until May 20th for any number of reasons, the buyer is generally not at fault for having committed a material breach of the contract. If the buyer refuses to close at all, that’s another story and the seller can take several steps to enforce the contract.

However, if the seller had made time a material part of the contract—let’s say the seller needed the funds by May 15th to close on another deal—and the buyer was unable to close on time, the seller could seek damages. In other words, if the May 15th closing date was a material part of the contract, the seller would be entitled to damages for the buyer’s breach of contract.

When time is a material consideration of the transaction, that party must negotiate to make time of the essence (i.e. make time a material component of the contract).

How do you make Time of the Essence?

Whether time is of the essence of the transaction is up to the parties. This is something that would need to be negotiated. The contract would need to explicitly state that time is of the essence.

For example:

“Buyer acknowledges and agrees that TIME IS OF THE ESSENCE with respect to all actions required to be performed by Buyer on the Closing Date. Buyer acknowledges and understands that the timing of such actions is a material part of the Agreement. In the event Buyer fails to complete such actions on the Closing Date, Buyer will be deemed in default and Seller may terminate the Agreement immediately and retain the Deposit as liquidated damages.”

Unless the contract explicitly says otherwise, the timing will not be a material component of the contract.

Does this mean that if the contract calls for a closing on May 15th this year, that the buyer could delay for months or years?

The answer really depends on the facts and circumstances of a specific situation and what is reasonable in light of those facts. In some instances, it may be reasonable to delay closing for a year or more if an environmental condition is found to exist requiring administrative clearance and remediation. In another instance, a delay of two months may not be reasonable when all conditions have been met. The answer depends on the transaction and the negotiated terms of the purchase agreement.

Can I make Time of the Essence after the contract is signed?

Yes. In fact, that is often how it happens in New Jersey. Once the original closing date has passed, either party may serve a formal notice fixing a new closing date and making time essential, so long as the new deadline is reasonable under the circumstances. Courts look closely at reasonableness. They consider the original closing date, the date notice was given, the reason for the delay, and whether the receiving party had a fair opportunity to perform.

Standard procedure is straightforward, but details matter. The attorney for the party ready to close usually sends a written Time of the Essence letter to the other side after the scheduled closing date has passed, or when the delay has become unacceptable. The letter should identify the contract, recite the missed or pending closing date, set a specific new date, time, and place for closing, and clearly state that time is of the essence and that failure to appear ready to close will be treated as a default. The sending party should also make sure it can actually perform on that date. A party should not declare Time of the Essence unless it is truly ready, willing, and able to close.

How much notice is enough? There is no magic number in every case, but the notice must be reasonable. In practice, many New Jersey attorneys use about ten days as a common benchmark, but reasonableness depends on the facts. Ten days may be enough if everyone is otherwise ready and only a final date is needed. Ten days may be unreasonable if the delay involves a holdover tenant, unresolved title defects, or lender conditions that cannot realistically be cured in that window. A rushed notice can fail, and an invalid notice may leave the contract alive rather than put the other side in default.

The biggest pitfalls come from poor timing, poor drafting, and poor strategy. First, do not send a Time of the Essence notice too early. If the original closing date has not passed and the contract does not already make time essential, the notice may not have the intended effect. Second, do not set an unrealistic deadline. Courts dislike gotcha tactics. Third, do not send the notice unless your client can fully perform on the chosen date. A buyer needs funds and lender clearance. A seller needs marketable title, conveyance documents, and any required municipal items. Fourth, do not rely on vague language. The notice should leave no doubt about the exact date, time, place, and consequence of nonperformance. The buyer or the seller can make time of the essence AFTER the specified closing date. If either the buyer or the seller fails to close, the other party can send written notice that time is now of the essence. The notice must provide for a reasonable timetable considering all facts and circumstances.

For example, in a contract with an estimated closing date of May 15th, if the buyer fails to close on the 15th, the seller may send notice to the buyer that the deal must close and provide a new date. 14 days’ notice will likely be reasonable, but again, the date selected must be reasonable based on all facts and circumstances. See Ridge Chevrolet Oldsmobile, Inc. v. Scarano, 238 N.J. Super. 149, 156 (App. Div. 1990).

What remedies are available?

What happens if the other side breaches after Time of the Essence is properly in place? The nondefaulting party may pursue the usual contract remedies. In many real estate cases, the principal remedy is specific performance, because every parcel of real property is considered unique. A buyer may sue to force the seller to convey title. A seller may seek damages, retain or dispute the deposit depending on the contract terms, or defend against a buyer’s claim. Damages can also include out-of-pocket losses caused by the breach, subject to proof and the terms of the contract.

First, to enforce a time of the essence clause, the party seeking enforcement must show that it was ready, willing, and able to perform its contractual obligations on the closing date. Gorrie v. Winters, 214 N.J. Super. 103, 104-08 (App. Div. 1986).

Second, a well drafted contract could provide a set of remedies. In the clause referenced above, the seller could terminate the contract and keep the deposit. That’s a significant penalty that will motivate any buyer to satisfy its obligations.

Other remedies may include specific performance and out-of-pocket costs, though obtaining those remedies will generally require litigation.

When seeking remedies it is best to have those remedies built into the contract and avoid litigation.

Best practice

A time of the essence clause is a powerful tool that can also backfire when not used correctly. For this reason including such a provision is not always a good idea. When used the language should be clear, concise, consistent with the other contractual language (for example, you can’t force a closing at a time when the buyer is still entitled to due diligence) and should be narrowly tailored to the relief sought by the non-breaching party.

To better understand whether you should make time of the essence in your deal, consult with a qualified attorney.

Originally published: June 1, 2021
Last updated: March 16, 2026