Time is an essence – Part 3. When time is not essential, can you claim damage?
Take an example, you have a basket of fruits in a pasar malam on sale. A customer came and booked for it. He gave you a deposit of 10% but due to its heavy weight, he promised to collect it when going back. At 10pm, while you are packing home, he has not come yet. What happen? He could have forgotten. Your basket of fruits get rotten. You suffered loss.
In property, this might be the case when people put booking fee, yet never commit to rent/purchase. While waiting for the decision, you could suffer lost. For example, you have a relative who you verbally committed renting your shop for business. Yet, he never make an indication of time – and due to your closeness with him, time is not an essence of this contract. Can you call off the contract? Can you ask for compensation for the time lapsed where your shop is vacant?
S.56(2) CA50 says when time is not an essence, the promisee can claim damage from the promisor. You (promisee) was to let your shop to this relative (promisor) who said “uncle, why not I take over your shop to try out my new business?” When time is not an essential component of the contract, you can ask for compensation if you suffer a loss. However, what is reasonable time? This is to follow market practice. If letting of shop is commonly taken as 1 month for renovation/getting ready. Then, the reasonable time would be 1 month. Beyond 1 month, you can claim for damage.