The tenants were given an option in the lease to purchase the freehold: ‘if . . the lessees . . should give three months notice . . and should at the expiration of such notice pay . .’,
Held: Time was of the essence: ‘I apprehend the rule of law applicable to cases like the present is perfectly clear. No doubt, if an owner of land and an intending purchaser enter into a contract constituting between them the relation of vendor and purchaser, and there is a stipulation in the contract that the purchase-money shall be paid and the contract completed on a certain day, this Court in ordinary cases has established the principle that time is not of the essence of the contract, and that the circumstance of the day fixed for the payment of the money and completion of the purchase being past does not entitle either party to refuse to complete. On the other hand it is well settled that where there is a contract between the owner of land and another person, that if such person shall do a specified act, then he (the owner) will convey the land to him in fee; the relation of vendor and purchaser does not exist between the parties unless and until the act has been done as specified. The Court regards it as the case of a condition on the performance of which the party performing it is entitled to a certain benefit; but in order to obtain such benefit he must perform the condition strictly. Therefore, if there be a day fixed for its performance, the lapse of that day without its being performed prevents him from claiming the benefit.’
Judges:
Sir Richard Kindersley V-C
Citations:
(1864) 2 Drew and Sm 278
Cited by:
Cited – Haugland Tankers As v RMK Marine Gemi Yapim Sanayii Ve Deniz Tasimaciligi Isletmesi As ComC 9-Mar-2005
An option agreement was granted for the sale of a ship hull. The option was excercised but the defendant claimed the commitment fee required was not paid.
Held: The exercise of an option had to be in the precise terms set out in the contract. . .
Cited – Di Luca v Juraise (Springs) Limited; Amess and Amess CA 6-Oct-1997
In regard to options for the purchase of land, time constraints are of the essence. An option is not a contract but an irrevocable offer that matures into a bilateral contract upon due exercise of the option during the option term . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant
Updated: 30 April 2022; Ref: scu.223443