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CMA Foundation · Fundamentals of Business Laws and Business Communication · Essential Elements of a Contract, Offer and Acceptance

Under Section 55, whether time is of the essence of a contract depends mainly on:

It depends mainly on the intention of the parties. Section 55 says a contract becomes voidable for late performance only if the parties intended time to be of the essence; otherwise the promisee is only entitled to compensation for any loss caused by the delay.

  1. AWhether the contract is in writing
  2. BThe intention of the partiesCorrect
  3. CWhether the promisor is a company or an individual
  4. DThe value of the goods or services involved

Explanation

Section 55 makes the consequences turn on whether it was the intention of the parties that time should be of the essence. Neither writing, the type of promisor, nor contract value is the test stated in the section.

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