Time Really Is "Of The Essence"

"Time shall be of the essence hereof."

"Time is of the essence in the performance of the Parties' respective obligations."

"Time shall be of the essence of this agreement."

We've all seen these provisions in agreements, but there appears to be some confusion as to the real impact of these words and why they are needed in the first place.

My old copy of Black's Law Dictionary (which was my first book purchase in my first year of law school – and is the only book I still have from that first year) states:

Time is of the essence of contract – . . . When this phrase is in a contract, it means that a failure to do what is required by the time specified is a breach of the contract.¹