Final answer:
In contract law, if 'time is of the essence,' it means that deadlines are critical to the contract and missing them may lead to breach and legal remedies.
Step-by-step explanation:
When a contract states that time is of the essence, it signifies that the specified timing and deadlines in the contract are fundamental to the agreement. This legal term means that all parties must perform the contractual obligations within the time periods outlined. A failure to adhere to the timelines can constitute a breach of contract.
This term is often included in contracts where delays can be especially harmful to one or both parties, emphasizing that deadlines are to be taken seriously. Under these circumstances, if one party does not fulfill their contractual duties in time, the other party may be entitled to legal remedies, which could include termination of the contract or seeking damages for any losses incurred due to delay.