Title

IV.6.6 - Time is of the essence

Content

No. IV.6.6 - Time is of the essence

Unless otherwise agreed by the parties or contrary to the intrinsic nature of the contract, time limits and other contractual stipulations as to the timely performance of the parties' obligations have to be strictly complied with ("time is of the essence").

Commentary

The Principle takes account of the fact that time and costs are essential elements in the dealings of international businessmen. The time factor dominates contractual performances by international traders. For that reason, stipulations as to the timely performance of the parties' contractual obligations must be strictly complied with. Thus, a provision that stipulates that performance must be rendered "on" May 2 does not mean that performance may be rendered "around" May 2. Also, businessmen acting on a global scale must take the effect of the different time zones on the timely performance of their contractual obligations into account.

References

Doctrine

Berger, Klaus Peter, Internationale Bankgarantien, 3 DZWir 1993, at 1 et seq.Domingo, Ortega, Rodriguez-Antolin, Zambrana, Principios de Derecho Global, Navarra, 2006Horn, Norbert, Bürgschaften und Garantien, 6th ed., Cologne 1995Horn, Norbert, Das Recht der internationalen Anleihen, Frankfurt a.M. 1972Jenks, Edward et al., A Digest of English Civil Law, London, Sydney, Calcutta, Winnipeg, Wellington 1921.

Model Terms

ICC Uniform Rules for Demand GuaranteesICC Uniform Customs and Practice for Documentary Credits

Court Decisions

OLG Stuttgart, WM 1979, at 733 et seq.

Contract Clauses

1. Contractual Clause Relating to Timely PerformanceSales & Purchase Contract