When drafting a contract, it is not unusual to prioritize the substantive terms at the head of the agreement and to apply less scrutiny to the presumably less consequential provisions that form the tail. Indeed, clients demanding simplicity may grumble at the litany of “miscellaneous” subsections that appear to do little more than add length. Although it is true some terms are “more equal” than others, the omission of certain lesser provisions may create serious problems for clients.
In Blue Lagoon Development, LLC, v. Maury, 2015 WL 3875437, at *3-4 (Fla. 3d DCA June 24, 2015), the Third District Court of Appeal explained that, while a “time is of the essence” clause need not be expressed in a contract with respect to satisfying monetary requirements, the same is not true regarding non-monetary conditions, regardless of whether a deadline is specified in the contract.
In Blue Lagoon, Leon Medical Centers agreed to purchase vacant commercial land from Blue Lagoon Development, LLC, conditioned on Blue Lagoon obtaining a rezoning of the parcel by July 31, 2008. The contract did not include a “time is of the essence” clause. On July 16, 2008, the local zoning board approved Blue Lagoon’s application by resolution, which the Miami-Dade Department of Building and Zoning certified and enacted on July 23, 2008. The department's enactment, however, was subject to a 14-day appeal period that expired August 4, 2008 ― four days after the rezoning deadline in the contract. Id. at *1.
Meanwhile, on July 11, 2008, Leon purchased an adjacent, less expensive commercial parcel of land and no longer desired Blue Lagoon's parcel. On July 31, 2008, Leon sent a letter to Blue Lagoon terminating the contract purportedly because Blue Lagoon failed to timely obtain a non-appealable rezoning of the parcel. Notwithstanding the pre-deadline approval and the fact that no appeal of the department's enactment ever materialized, the trial court ruled that Leon's termination notice was valid. Id. at *2.
The Third District reversed the trial court, in part because of the absence of a “time is of the essence” clause, explaining that the mere designation of a particular date for performance of a non-monetary condition does not make that date the essence of the contract absent a showing that reasonable delay would have constituted a material breach or caused significant injury to the party entitled to performance. Id. at *4 (citing Command Sec. Corp. v. Moffa, 84 So. 3d 1097, 1100 (Fla. 4th DCA 201). Here, the Third District may have found off-putting Leon’s hyper-technical and “transparently makeweight” attempt at terminating an otherwise valid but later undesirable contract based on a condition that was, as the court determined, timely performed. Id. at *3. Still, the point is clear: A specified non-monetary condition, i.e., a rezoning deadline, may not necessarily be firm without the express confirmation that time is of the essence. With that point comes a reminder to our clients — miscellaneous non-monetary contract terms are more than mere clutter, and their inclusion or exclusion may have profound effects on what precedes them.