Question

In which of the following cases time is the essence of the contract?

• A. Where parties to the contract have expressly agreed to treat it as such.
• B. Where the nature of the transaction and intention of the parties were such that the performance within stipulated time was essence.
• C. Both
• D. None

Answer 1

Answer: (C)

Both

• As per section 55 of the act, when a party to a contract promises to do a certain thing at or before a specified time, and fails to do such thing at or before a specified time, the contract or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of essence of the contract.
  
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• If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time.
  
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• If, in case of a contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation of any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of acceptance, he gives notice to the promisor of his intention to do so.