The Law on Time as Essence in Construction Contracts: A Critique

RGNUL Financial and Mercantile Law Review, Volume VIII, Issue 1, p. 1-36 (2021)

36 Pages Posted: 19 Apr 2021

Date Written: December 10, 2020

Abstract

The concept of time as essence in construction contracts is a controversial topic. Even though parties routinely provide in their agreements that time is of the essence, these clauses inevitably figure in construction disputes. Arbitral tribunals and courts have mostly decided such disputes holding those clauses to be of no legal effect, mainly by relying on the decision of a three-judge bench of the Hon’ble Supreme Court in Hind Construction Contractors v. State of Maharashtra. This paper argues that Hind Construction was wrongly decided, that it is not good law and that it requires reconsideration given the changing times. The paper further notes that parties do not appear to have circumvented the adverse effect of Hind Construction. Usually, in such situations, there is a change in contracting behaviour by the use of appropriate contracting language. Perhaps, this is due to the lack of direction by courts as to what appropriate language could be used in contracts to make time as the essence of the contract. This paper concludes by suggesting possible methods by which courts and arbitral tribunals could validly enforce time-as-essence clauses.

Keywords: Construction Contracts, Contract Law, Termination, Time as Essence, Hind Construction v Maharashtra

JEL Classification: K1, K4, K12, K19

Suggested Citation

Srinivasan, Badrinath, The Law on Time as Essence in Construction Contracts: A Critique (December 10, 2020). RGNUL Financial and Mercantile Law Review, Volume VIII, Issue 1, p. 1-36 (2021), Available at SSRN: https://ssrn.com/abstract=3826815

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
100
PlumX Metrics