1.01  Delay can be defined in various ways,¹ but a useful starting point is Cable (William) Ltd v Trainor,² where the New Zealand Court of Appeal had to define the word in the context of the statute of limitations.³ In the words of Shorland J:⁴

In the contractual context this means the postponement of performance beyond the point of time when the obligation in question should have been performed.⁵ So the first question is whether the proper time for performance has passed.

(p. 4) 1.02  In many cases the time of performance is easy to determine. However this assumes both that the contract has set a time for performance of an obligation, and that such an obligation exists in the first place. But neither of these factors will necessarily apply. Sometimes the contract may provide for performance but may leave the time unspecified, in which case a reasonable time for performance will have to be implied.⁶ In other cases questions of delay may arise even where there is no obligation to perform. This may seem paradoxical, but take the case of a unilateral obligation, as where an insurance policy gives an option for renewal provided that the premium is paid by the set date.⁷ Here the insured person has no obligation to pay the premium at all; he or she may legitimately decide to let the policy lapse. However, should the insurer refuse to renew on the grounds that the premium has not been tendered by the due date, the issue may arise as to whether performance has been rendered on time.⁸ For this reason, we must address the issue of unilateral obligations of this sort even though they do not raise issues of timely performance in the strict sense.⁹

1.03  The time for performance can be determined in a number of ways. Thus, for instance, section 14(1) of the Supply of Goods and Services Act 1982 refers to three possibilities; time can be fixed by the contract, or left to be fixed in a manner agreed by the contract, or determined by the course of dealing between the parties. Often an exact time or date is set for performance, but there are other possibilities; for instance, the contract may use expressions like ‘as soon as possible’,¹⁰ or ‘immediately’,¹¹ or ‘with all reasonable dispatch’,¹² or it may specify for performance by the promisor at a certain rate.¹³ Finally, the contract may be (p. 5) silent as to time. There are four situations here which merit further discussion. These are: (1) where a time is set by the contract; (2) where the contract is silent as to time; (3) where performance is due on demand; and (4) the problem of timely performance in unilateral contracts.

1.04  Where a time is set for performance, the promisor is bound to perform at that time, and will be liable for breach of contract if he or she fails to do so without good excuse. It does not matter whether or not time is ‘of the essence’ with regard to the obligation in question.¹⁴ It was thought in the past that time stipulations were only binding when time was of the essence, and that otherwise the promisor only had to perform either at the time set or within a reasonable time thereafter.¹⁵ This analysis suggested that in most contracts time stipulations did not mean what they said.¹⁶

1.05  However, it was argued that this proposition was based on a misunderstanding.¹⁷ The common law and equity did not differ in their approach to the construction of contractual terms.¹⁸ A time stipulation, like any other, was a term of the contract, and action could be taken if it were broken. Where the common law and equity differed was in the matter of remedies. The common law, or so it was thought, would generally allow the promisee to terminate in the event of late performance by the promisor.¹⁹ Equity, however, would relieve against the harshness of this in suitable cases by granting a decree of specific performance to the promisor, coupled if necessary with a common injunction (p. 6) to restrain the promisee from taking steps to have the contract set aside at law.²⁰ To that extent, and that extent only, was the time stipulation ignored by equity.²¹

1.06  The matter was finally cleared up by the House of Lords in Raineri v Miles,²² a case involving a chain of property transactions. Because of the delay of one Wiejski in completing the sale of his house to Miles, Miles in turn became unable to complete the sale of his own house to Raineri, and was accordingly held liable in damages. Subsequently Miles brought third party proceedings seeking to be indemnified by Wiejski. The contract between Miles and Wiejski had provided for completion ‘on or before’ 12 July 1977, but it was agreed that though Wiejski had failed to meet this date time was not of the essence and completion had eventually taken place. So the question arose directly whether a party who failed to perform at the set time was liable in damages in a case where time was not of the essence.

1.07  The House of Lords, by a majority of four to one,²³ held that Miles had a valid claim. Whether time was or was not of the essence did not affect the promisee’s right to damages, and any statements to the contrary should be disregarded. In the words of Lord Edmund-Davies:²⁴

1.08  The effect of Raineri v Miles, which has been followed around the common law world,²⁵ was to eradicate an heretical doctrine from the law. It is now clear that, whether time is of the essence or not, failure to perform on time by the promisor (p. 7) is a breach of contract for which damages can be obtained. The question whether time is of the essence is crucial in determining the remedies available to the promisee for the promisor’s delay in performance – in particular, whether the promisee can terminate performance and treat the contract as repudiated.²⁶ But it does not affect the obligation of the promisor to perform on time, or the right of the promisee to claim damages if this is not done.

1.09  Of course, the mere fact that a time is mentioned in the contract does not necessarily mean that the promisor is bound to perform then and no later. For instance, the time in question may be intended merely as an estimate, as where in a charterparty a ship is given an ‘estimated time of arrival’,²⁷ or is said to be ‘expected ready to load’ on a certain date.²⁸ Here the promisor is not bound to have the ship ready on that very day; it is enough if he or she honestly expects that the vessel will be ready as stated, and that this expectation is based on reasonable grounds.²⁹

1.10  In other cases, what may appear at first sight to be a deadline may be treated by the courts as no more than an estimate. Thus for instance it is not uncommon for building contractors to put forward programmes or schedules to the owner or architect showing completion some time ahead of the official contract date.³⁰ These may have been approved by or on behalf of the owner, and may even be expressed so as to override the general contract terms.³¹ However, such provisions have been held to constitute no more than a target or guide,³² and it has been said that in the absence of clear words they should not be interpreted as altering the substantive rights or obligations of the parties.³³

1.11  Where the contract is silent as to the time for performance, the law implies a reasonable time. We shall now consider the scope of this obligation before going on to look at what amounts to a reasonable time in any given case.

1.12  The obligation to perform within a reasonable time has been implied by the common law into contracts of all kinds:³⁴ the sale of goods,³⁵ charterparties,³⁶ building contracts,³⁷ conveyancing,³⁸ carriage of goods by land,³⁹ the exercise of options,⁴⁰ contracts for services,⁴¹ bailment⁴² and even (when these were legally enforceable) contracts to marry.⁴³ The law is said to imply such an obligation in every case where a party to a contract undertakes to do an act, the performance of which depends entirely on himself, and the contract is silent as to the time of performance.⁴⁴

(p. 9) 1.13  In most cases, however, the obligation to perform within a reasonable time is imposed by statute. We must distinguish here between contracts for the sale of goods and contracts for the supply of services, and also, in relation to the sale of goods, between consumer contracts and other contracts.

1.14  In the ordinary run of cases, a seller’s obligation to deliver the goods and the buyer’s obligation to accept delivery are governed by the Sale of Goods Act 1979, which codifies the common law rule that these obligations must be performed within a reasonable time if the contract is silent as to time.⁴⁵ However, in relation to consumer contracts section 28(3) of the Consumer Rights Act 2015 specifies that the goods must be delivered without undue delay, and in any event, not more than 30 days after the day on which the contract is entered into.⁴⁶

1.15  Contracts for services, on the other hand, are covered by section 14(1) of the Supply of Goods and Services Act 1982, which reads as follows:

A contract for the supply of a service is simply defined as a contract under which a person (the supplier) agrees to carry out a service.⁴⁸ What is a service? The word is capable of the widest meaning,⁴⁹ but the Act itself does not give any definition except to exclude contracts of service and apprenticeships,⁵⁰ and to say that a contract is not prevented from being one for the supply of a service by the fact that goods pass under it.⁵¹ There is a dearth of case law on the topic, though the provision has been held to apply to a number of situations including the provision of training for the employees of a company,⁵² the obligation to submit a dispute (p. 10) to arbitration⁵³ and the supply of a computer software package.⁵⁴ It has been said to apply to building contracts,⁵⁵ but not to a contract for a tenancy.⁵⁶ Definitions given in other contexts are not much help.⁵⁷ However, there is nothing to indicate that section 14(1) of the 1982 Act is confined to consumer transactions,⁵⁸ and in the end there is no reason why it should not be interpreted in a broad manner, given that it merely codifies the common law.

1.16  Reasonable time is said to be a question of fact, both at common law and by statute.⁵⁹ Thus the question whether performance had been rendered within a reasonable time was in the past one for the jury and not the judge to decide.⁶⁰ Now that the jury has virtually disappeared from civil cases, the difference between questions of law and questions of fact has become much less significant.⁶¹ Even so, the question of what makes for a reasonable time is still not one which it is possible to answer with any great precision, not least because the answer depends on the circumstances of the particular case. However, there are a number of factors that have been considered relevant by the courts, and which it is worth looking at more closely in this context. We must distinguish here between those factors which were in existence at the time when the contract was made, and those which came into existence at a later stage.

1.17  The first principle is that the courts must look at the circumstances of each case in so far as they were within the contemplation of the parties at the time of the contract. In the words of Alderson B in Ellis v Thompson:⁶²

Or as McCardie J said in Pearl Mill Co Ltd v Ivy Tannery Ltd:⁶⁴

Though the specific reference in both cases here was to the seller’s duty of delivery, these remarks are applicable in the wider context. It has been said that what amounts to a reasonable time in this context has to be determined at the date of the contract, and must be judged by an objective test applicable to both parties.⁶⁶ The court is not interested in what either party subjectively had in mind. Rather, the court has, as Lord Hoffmann said, to look at what the words would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.⁶⁷ In the words of Staughton LJ:⁶⁸

Bearing this in mind, we may now consider some of the most important factors affecting the obligation to perform within a reasonable time.

1.18  One crucial factor is the normal time it would take for the obligation to be performed. In Nelson v Patrick⁶⁹ the claimant sued the defendant for delay in taking back at the contract price various casks in which cement had been consigned. It was said by Wilde LCJ that the defendant had a reasonable time to perform the obligation, and that the court should bear in mind that:⁷⁰

On the other hand, where in Charnock v Liverpool Corporation⁷¹ a garage had taken eight weeks to do repairs to the plaintiff’s car, they were held to be liable in damages for the delay, on the grounds that the task should normally have taken only five weeks. In Jonathan Wren & Co Ltd v Microdec plc⁷² the contract was one for the supply of a specialist computer software package. It was held that the supplier was bound to supply the package within a reasonable time, and that in deciding what this should be the court should take into account the fact that the software was already in existence, and that it would not be too difficult to install it and have it up and running within a relatively short space of time. Where the obligation is an onerous one, the courts will, other things being equal, allow for some delay in performance, whereas they will be less inclined to do so where it is simple and straightforward.

1.19  Where a contract provides for performance at a fixed time it is no excuse for the promisor to say that some delay was contemplated at the time of the contract, but the courts will take this into account when the contract merely calls for performance within a reasonable time. This can be illustrated by Carlton SS Co Ltd v Castle Mail Packets Co Ltd,⁷³ where a ship was chartered to go to a certain dock and load a cargo of rails ‘always afloat’. No time was set for the loading to be completed. The dock in question, as both parties knew, was affected by tides, so that the ship was unable to load without grounding except at the spring tide. Loading commenced, but had to be abandoned on the approach of the neap tides, and could not be completed until the following month. The charterer was held not to be liable in damages for the delay. The shipowner had chosen to insert the ‘always afloat’ term in the full knowledge that this might cause delay in loading at that particular dock, so could not complain about that delay, given that the charterer had a reasonable time in which to complete the loading.⁷⁴

1.20  Another case illustrating this principle is US v 476 Acres of Land,⁷⁵ where the defendant offered to sell a parcel of land to the US Government. The offer was accepted, and it was provided that the defendant could remain on the land rent free for one year from the date of the offer. Proceedings to acquire title were not instituted by the claimants until two years later, and the defendants argued that there had been an inordinate delay. But the court held that the claimants had not been too tardy in the circumstances, since the contract gave them a reasonable (p. 13) time for performance and the parties had clearly contemplated that there would be some lapse of time before title was acquired.

1.21  However, the mere fact that the parties foresaw that there might be some delay will not deprive the promisee of a remedy where the delay that has ensued is out of all proportion to that expected,⁷⁶ still less when it has been so protracted as to frustrate the contract.⁷⁷ What matters here is not so much the amount of the delay in itself as the ratio of the expected delay to that which actually takes place. So in Denison v Ladd⁷⁸ a purchaser of land was held to be entitled to terminate the contract for a four-month delay in the furnishing of an abstract of title by the vendor, the evidence having showed that this could have been done in ten days at the most.

1.22  The subject matter of the contract is obviously a very important consideration. For instance, where a seller is obliged to deliver the goods within a reasonable time, the period will be shorter for perishable goods than for other goods, and the same will be true in a rapidly fluctuating market. There are a number of cases which illustrate this. In Jaslow v Waterbury Co⁷⁹ a contract for the sale of rope was cancelled by the buyer six months or so after it had been signed. Only a very small proportion of the goods ordered had been shipped, and the sellers were hampered by their inability to obtain the necessary shipping permit. It was held that rope being a commodity subject to rapidly fluctuating prices, it was unreasonable to expect the buyers to remain bound for such a protracted period. Similarly, in Nosotti v Auerbach⁸⁰ four months was said to be a reasonable time for the vendor to vacate premises where the subject matter of the contract was a lease with only eighty years left to run. In United Dominions Trust (Commercial) v Eagle Aircraft Services Ltd⁸¹ an aeroplane was purchased by the plaintiff finance company and then let out on hire purchase to one of the defendant’s customers. A ‘recourse agreement’ provided that, in the event of default by the customer leading to termination, the plaintiffs should have the right to call on the defendants to repurchase the aeroplane. The customer having defaulted on payment of the hire purchase instalments, the agreement was terminated; five months later, the plaintiffs sought to activate the recourse agreement. It was held to be an implied term of the contract that the plaintiffs had to do this within a reasonable time after termination. Five months was far too long a delay in the case of a rapidly depreciating asset such as an aeroplane. In the words of Lord Denning MR, it would have been absurd to suppose that UDT could (p. 14) wait for twelve months or more, and let the aircraft go to rack and ruin, and still call on Eagle to repurchase.⁸²

It would have been different if the subject matter of the contract had been an item that maintained its value; indeed, the whole point of the recourse agreement was to guard the finance company from being left with a depreciating asset on their hands.

1.23  In general a contract has to be construed on the basis of the words used by the parties, and for this reason evidence of pre-contract negotiations is normally not allowed.⁸³ However, in the present context it may be relevant to ask whether the promisor knows that the promisee needs to have a speedy performance. In Jonathan Wren & Co Ltd v Microdec plc,⁸⁴ the claimants ordered a specialist computer software package from the defendant suppliers, and indicated to them that they wanted to have the package up and running by the end of July 1996. The suppliers made no promise as to the date of delivery, but did not indicate that they would be unable to meet the date suggested by the claimants. The claimants subsequently sought to cancel the contract on the ground that the software was unfit for purpose, but the question of the due time of delivery arose in the course of a trial of the preliminary issues. It was held that this was a case where section 14 of the Supply of Goods and Services Act 1982 applied, and that the obligation was to have the software installed within a reasonable time. However, in assessing what that time was the court should have regard to the fact that the suppliers knew that the claimants wanted the software installed quickly, and that there was nothing to prevent the suppliers doing so. In sum, while parol evidence is not admissible to convert a contract to perform in a reasonable time into a contract to perform in a fixed time, such evidence may be relevant in establishing what a reasonable time is in any given case.⁸⁵

1.24  The custom of the trade may also be relevant in this context. In FC Bradley and Sons Ltd v Colonial & Continental Trading Ltd⁸⁶ evidence was admitted to show a custom of the Covent Garden vegetable market that potatoes sold in the market should be available for ‘immediate’ delivery, it being held in the instant case that the time allowed for delivery should be (p. 15) seventy-two hours in all. Similarly, in Ross Brothers Ltd v Edward Shaw & Co⁸⁷ the time allowed to the seller for delivery of a consignment of yarn was assessed in the light of a custom that on receiving orders he would be allowed sufficient time to contact his suppliers in Belgium. In Rochester Distilling Co v Geloso⁸⁸ the claimants agreed to sell to the defendants some barrels of whisky and advertising materials. At the end of the month the defendants sought to cancel the contract on the ground that none of the advertising material had been delivered. But it was held that the claimants were not in default here; the custom of the trade was that advertising material would not be issued until the buyer had withdrawn the liquor from bond, which had not yet been done in the present case.

1.25  An obligation to perform at a fixed time is a strict one, it being no defence for the promisor to argue that all due diligence was used.⁸⁹ But the obligation to perform within a reasonable time may imply an obligation to perform with reasonable diligence.⁹⁰ In Hales v London and North Western Rly,⁹¹ the defendants agreed to deliver goods by luggage train to a destination near Sunderland. Since the place in question was not served by rail, the defendants, as was their normal practice, sent the goods to Newcastle, where they were then kept for several days waiting for the carrier to convey them onwards. The court upheld the jury’s finding that the defendants had failed to deliver the goods within a reasonable time. The goods could have been sent by rail from Newcastle to Sunderland, and then taken on by carrier from there, in which event they would have arrived several days earlier. The defendants’ failure to take reasonable steps to ensure the speedy delivery of the goods led to the conclusion that they had failed to do so within a reasonable time.

1.26  It is different where the promisor has done all that can be reasonably expected. Thus in Taylor v Clay,⁹² a case concerning a charterer’s obligation to load the ship within a reasonable time, the charterer was held not to be responsible for delays in loading caused by the carelessness of the crew, which had led to the ship being damaged and put out of action whilst repairs were effected. Here the charterer was not responsible for the crew, and the delays were beyond his control. (p. 16) A similar approach is seen in Rochester Distilling Co v Geloso,⁹³ where the sellers agreed to deliver a quantity of advertising material to the buyer. It was held that the buyer was not entitled to reject the goods on the grounds of late delivery; no time for delivery having been specified, the sellers’ obligation was to do so within a reasonable time, and they had done all that could reasonably have been expected of them in the circumstances.

1.27  Circumstances to be taken into account in this context must be in the contemplation of the parties at the relevant time.⁹⁴ A promisor guilty of delay cannot rely on obstacles to performance which are not within the contemplation of the promisee. In Charnock v Liverpool Corporation⁹⁵ a garage was not allowed to plead shortage of staff and the pressure of other work as an excuse for delay in repairing a car; it was held that though they had a reasonable time in which to do the work, these factors were not within the knowledge of the customer. In the same way, the fact that the promisee has special reasons for wanting quick performance is irrelevant if these are not within the contemplation of the promisor. Thus in Foster v Heintzmann⁹⁶ the seller of a piano ordered on 1 September was held not to be liable for failure to deliver by Christmas when he was unaware that it was intended as a Christmas present.

1.28  It is different where the promisee is aware of the relevant factors. In Carlton SS Co Ltd v Castle Mail Packets Co Ltd,⁹⁷ the charterer was allowed to rely on the peculiarities of the harbour as an excuse for delay in loading, since these were well known to both parties. And in Panalpina v Densil Underwear⁹⁸ it was held that a consignment of shirts had not been delivered in a reasonable time when they did not arrive until 18 December, the sellers being fully aware that they were needed for the Christmas market.⁹⁹

1.29  As a general rule, events occurring after the contract was made cannot be taken into account in interpreting that contract.¹⁰⁰ This means that subsequent events can have no relevance in deciding the content of the obligation to perform within a reasonable time. However, such factors may be of great relevance in deciding (p. 17) whether such an obligation has been performed, and this is a matter to which we shall return.¹⁰¹

1.30  Sometimes the contract makes performance due on demand, as where a seller is bound to make delivery when requested by the buyer. Here the promisor need not perform unless and until the demand is made.¹⁰² However, two further questions arise. One is whether the promisor can withdraw from the agreement before any demand is made; this need not concern us further in the present context.¹⁰³ The other is, assuming the promisor is bound from the outset, how long he or she must remain ready and willing to perform if no demand has been made. Here the rule seems to be that the promisor cannot be made to wait indefinitely in this kind of case,¹⁰⁴ but that he or she cannot withdraw without giving the promisee one last opportunity to ask for performance. In Jones v Gibbons¹⁰⁵ the seller agreed to sell and the buyer to accept a certain quantity of iron, delivery to be ‘as required’. After a long delay, the buyer called for delivery, but the seller refused to go on with the contract on the ground that the buyer’s request had not been made within a reasonable time. It was held that the seller was not entitled to refuse delivery in this peremptory way. What he should have done was to inform the buyer that the iron was ready for delivery, and give him a chance to accept it; if the buyer’s request for delivery had still not been forthcoming, the seller could then have terminated the contract.¹⁰⁶

1.31  A unilateral obligation arises where the promisor agrees to pay money or to perform some other act in return for some stipulated act or forbearance by the (p. 18) promisee: ‘I will do X if you do Y’. The obligation is called ‘unilateral’ in this case because only one of the parties is bound; the promisor must do X if the promisee does Y, but the promisee does not have to do Y; indeed, the promisee does not have to do anything at all. Sometimes an obligation of this sort can be freestanding, as in the classic example where the promisor agrees to pay £10 to anyone who can find his lost dog. In other cases it forms part of a larger contractual matrix, as where a landlord gives the tenant an option to renew the lease if certain conditions are met.¹⁰⁷

1.32  Unilateral obligations of both these varieties can be made conditional on something being done by the promisee within a certain time. Thus in the first example, the owner of the dog may agree to pay the £10 to anyone who can find it before the end of the month. In the second example, the landlord may give the tenant an option to renew the lease provided that notice is given by a certain date. How is the proper time for performance to be determined in this context? In the strict sense, there is no such time, since the promisee has no obligation to perform at all, still less to do so by a certain date. However, all of this is of small consolation to the promisee who is debarred by delay from claiming the promised performance from the promisor. For this reason, it is convenient, albeit strictly improper, to discuss this situation in terms of late performance. However, the question is not whether delay in performance constitutes a breach of contract, for in the absence of any obligation to perform, there can be no breach. Rather, the issue is whether performance can be demanded even if the stipulated condition is not fulfilled on time. The dog is found after six weeks; the notice to renew is given a day late. Can the promisee still insist on being paid the £10, or on a new lease, as the case may be? Once again we must distinguish between a case where a time is specified and a case where the contract is silent as to time.

1.33  Where a unilateral obligation is made conditional on something being done by a certain day, the law traditionally adopts a strict approach to delay, the reason no doubt being the absence of any remedy in damages in such cases.¹⁰⁸ Thus it is said that time is ‘of the essence’ in relation to unilateral obligations,¹⁰⁹ so that delay by the promisee bars him or her from enforcing the relevant obligation on the part of the promisor. In Dibbins v Dibbins¹¹⁰ an option for a surviving partner to purchase a deceased partner’s share had to be exercised within three (p. 19) months of the death. The surviving partner being of unsound mind, his solicitors purported to exercise the option on his behalf, but were told that this could not be done without a court order. An order in lunacy having been obtained, a fresh notice was given, but by now the three months set for the exercise of the option had expired. It was held by Chitty J that the option could only be exercised in accordance with its terms, and that the second notice was accordingly equally ineffective. Again, in Hare v Nicoll¹¹¹ a contract for the sale of shares gave the seller an option to repurchase by notice given before 1 May 1963, payment to be made before 1 June. The seller purported to exercise the option a day late, and then failed to tender the price until 7 June. It was held by the Court of Appeal that the option had not been validly exercised, one reason given being that such options being a species of privilege for the benefit of the party on whom they were conferred, it was for that party to comply strictly with the conditions stipulated for the exercise of the option.¹¹²

1.34  However, though this rule has been described as ‘settled and invariable’,¹¹³ it is subject to some qualifications. In particular, as in the case of a promissory obligation, the set time limit may not be intended to be absolute.¹¹⁴ One example of this is the practice in insurance contracts of providing what are known as ‘days of grace’, whereby the right of the assured person to renew the policy is not lost by failure to pay the premium on time.¹¹⁵ This can be done by making the future risk conditional on the payment of the premium on a certain day or within so many days thereafter, or the contract can provide that the policy will not lapse if the renewal premium is paid within a certain number of days after it falls due.¹¹⁶ As a general rule, if the contractual context indicates that strict adherence to a time limit is not essential in any given case a broader approach must be adopted.¹¹⁷

1.35  There are other cases where the courts have been forced to take a more relaxed approach to time limits in this context. The most obvious example is in relation to rent review clauses.¹¹⁸ In the typical situation, the lease contains a clause allowing the landlords to initiate an agreed process of rent review by service of a notice on the tenants on or before a specified day. The issue is whether the landlords’ (p. 20) failure to serve the notice in time debars them from having the rent reviewed. On the basis of the orthodox approach it does; the landlords not being bound to have the rent reviewed at all, the clause is in the nature of an option which has to be exercised strictly according to its terms.¹¹⁹ However, this led to an intolerable situation in the inflationary days of the 1970s and 1980s, and the courts were not slow to find ways of avoiding the strict logic of the principle. One was to say that the stipulated date for the service of the notice was not in the nature of an option, but was merely a part of the machinery for the review of the rent;¹²⁰ but eventually the House of Lords got round the problem by invoking the ancient jurisdiction of equity to relieve against the strict construction of time stipulations,¹²¹ despite the orthodox view that this jurisdiction had no application in relation to options.¹²² This will be discussed more fully later,¹²³ but what it means is that the strict approach to time stipulations in the present context is a general principle rather than an invariable rule.

1.36  Of course, the possibility of relief in cases of this sort does not mean that the set date is totally without significance, any more than it is in the context of promissory obligations.¹²⁴ In particular, whilst before the set date the promisee can insist on performance as of right, after that he or she can only do so as a concession by the court.¹²⁵ Moreover, the passing of the set date in this context can give rise to other remedies for the promisor, most notably the service of a notice making time of the essence.¹²⁶ This again is a matter to which we shall return.¹²⁷

1.37  If no time is specified for the exercise of a unilateral option, the courts will imply a requirement that this be done within a reasonable time. In United Dominions Trust (Commercial) Ltd v Eagle Aircraft Services Ltd,¹²⁸ an aeroplane was sold to a finance company and then let out on hire purchase to an airline company. The contract contained a ‘recourse agreement’ allowing the finance company to (p. 21) call upon the sellers to repurchase the aircraft in the event of premature termination of the hire purchase agreement with the airline company. The question was whether this option could be exercised some five months after the termination had occurred. It was held that this was far too late, one reason being that this was essentially a unilateral offer that could only be accepted in accordance with its exact terms. Though no express time limit was set, it had to be implied that the option to invoke the recourse agreement be exercised within a reasonable time after the termination of the hire purchase agreement. In the context of a rapidly depreciating asset like an aeroplane, five months was far too long to wait, and it was therefore not open to the finance company to call upon the sellers to repurchase the aeroplane at such a late stage. As in relation to promissory obligations, what is a reasonable time in any given case is a question of fact.¹²⁹(p. 22)