What is the test for time is of the essence provisions in a contract?

British Columbia, Canada


The following excerpt is from Nicholls v. Martin, 1998 CanLII 6843 (BC SC):

The claim for damages for delay in construction of the home was the focus of much of the defendant's argument. A great deal of emphasis was placed on authority and argument with respect to the inclusion or non-inclusion of a "time is of the essence" provision. However, this misses the mark. The plaintiff's claim for these damages falls rather into those damages which are recoverable under Hadley v. Baxendale, either "in the contemplation of the parties" at the time of contracting, or of which the defendant had sufficient notice prior to concluding the contract. The defendant either contemplated, or should have contemplated given the notice of special circumstances, that if he constructed a sewage disposal system that was so defective that a new system had to be designed, permitted, and built, that some delay would result in the construction of the house.

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