Schenectady Steel Co. v. Bruno Trimpoli General Construction Co.
34 N.Y.2d 939, 359 N.Y.S.2d 560, 316 N.E.2d 875 (1974)
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Rule of Law:
When a 'time of the essence' provision in a contract is waived, the performing party is not relieved of its duty entirely but must instead perform its obligations within a reasonable time.
Facts:
- A general contractor entered into a contract with a steel supplier for the delivery of steel.
- The contract contained a 'time of the essence' provision, which established a strict and definite deadline for the steel supplier's performance.
- Through its actions or communications, the general contractor waived the 'time of the essence' provision.
- Following the waiver, the steel supplier failed to perform its contractual duties by delivering the steel within a time frame that would be considered reasonable under the circumstances.
Procedural Posture:
- A lawsuit was initiated in a New York trial court, likely by the general contractor against the steel supplier, for breach of contract.
- The trial court entered a judgment in favor of the general contractor.
- The steel supplier, as appellant, appealed the judgment to the New York Supreme Court, Appellate Division (an intermediate appellate court).
- The Appellate Division affirmed the trial court's judgment.
- The steel supplier, as appellant, appealed the Appellate Division's decision to the New York Court of Appeals (the state's highest court).
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Issue:
After a 'time of the essence' clause in a contract has been waived, does a party's subsequent failure to perform within a reasonable time constitute a breach of contract?
Opinions:
Majority - Per Curiam
Yes. After a 'time of the essence' clause is waived, a party's failure to perform within a reasonable time constitutes a breach of contract. The court reasoned that waiving a specific, strict deadline does not eliminate the obligation to perform; it merely substitutes the 'time of the essence' standard with a 'reasonable time' standard. While the court disagreed with the lower court's reasoning that the 'time of the essence' element was reimposed, it found the outcome correct because the steel supplier's delay was so significant that it failed to meet even this lesser standard of reasonableness. Therefore, the supplier was in breach, and the court found no cause to disturb the lower court's judgment.
Analysis:
This decision clarifies the legal effect of waiving a 'time of the essence' clause in contract law. It establishes that such a waiver is not a license for indefinite delay but rather converts the performance deadline to a 'reasonable time' standard. This creates a more flexible but still enforceable obligation, preventing the waiving party from being left without a remedy if the other party's delay becomes excessive. The ruling provides important guidance for commercial contracts, underscoring that even after a waiver, timeliness remains a material component of performance.
