If a contract does not contain the phrase “Time is of the essence,” what must be true for damages due to delay to be recovered?

The correct answer highlights the importance of explicit clauses in contracts regarding the timing of performance. When a contract does not include the phrase “Time is of the essence,” it generally indicates that the parties did not intend for strict adherence to deadlines. In this context, recovering damages for delays becomes difficult because the law assumes that delays may be acceptable or that they do not substantially affect the overall agreement.

To successfully recover damages for delay in the absence of this phrase, parties must demonstrate that the specific terms of the contract or the nature of the agreement imply strict adherence to performance timelines, or that other legal doctrines apply. However, without an explicit clause stating that time is critical, courts typically do not favor claims for delay unless there is clear evidence of mutual agreement on the timeframes involved.

In this case, the other choices do not accurately address the legal principles at play. Mutual agreements may help, but they do not replace the need for explicit terms in the original contract regarding time. Signing a contract within a specific timeframe generally does not have any bearing on recovery for delays unless discussed in the original terms. Lastly, while oral contracts can address many issues, legal recovery for delays is more effectively established in written agreements, especially without a specified clause.