Can "time of the essence" be established unilaterally after a contract has been signed?

The concept of "time of the essence" in a contract refers to the requirement that contractual deadlines must be strictly adhered to. Establishing this provision essentially emphasizes that timely performance is crucial to the agreement. The correct choice suggests that once a deadline has lapsed, in certain jurisdictions, a party may still be able to declare "time of the essence."

In practice, many states provide that even after a deadline has expired, a party can invoke "time of the essence" if they provide proper notice and the other party has not materially changed their position based on the delay. This reflects a balance between enforcing deadlines and allowing some flexibility in real estate transactions, recognizing that circumstances can lead to delays that parties might wish to formalize after the fact.

Other options do not hold because requiring mutual agreement to establish "time of the essence" does not account for situations where one party may need to invoke it after a deadline has passed. Likewise, suggesting that it can only be established before the deadline fails to recognize that parties may wish to clarify expectations even post-deadline. Lastly, the idea that it is irreversible once agreed overlooks the dynamic nature of contracts, where parties may agree to modify terms or clarify intentions under certain conditions.