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Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →Most of a property contract is about what the parties must do. One short phrase is about when, and it changes the weight of every date in the document. "Time is of the essence" means that a deadline in the contract is a condition of the bargain, not a target. In Queensland that phrase sits in the standard contract used for most home sales, and it is the reason a settlement that slips by a single afternoon can, in principle, cost a buyer the property and the deposit, or cost a seller the sale.
The rule is strict, but it is no longer bare. Since 2022 the standard contract has let either side take a short extension without asking permission. Since 1 August 2025 the Property Law Act 2023 has added statutory relief when computers fail or a cyclone, flood or emergency gets in the way. This guide explains what the phrase means, where each safety valve comes from, how long each one lasts, and how the clock starts again afterwards. It describes the general rules in Queensland; the outcome in any one sale depends on the contract actually signed.
REIQ and Queensland Law Society standard residential contract, clauses 6.2 and 6.3, as summarised by Proctor and by law firm Bradley Bray; Property Law Act 2023, section 81.
What the phrase means
In an ordinary contract, being a little late is a breach that can be compensated with money. The other party is still bound to go ahead. When time is of the essence, the position is different. Performing on the day becomes essential, so a party who is not ready, willing and able when the day arrives is in default in a way that lets the other side choose to end the contract.
Related readThe body corporate certificate: what a Queensland unit buyer is toldThe standard Queensland contract, published jointly by the Real Estate Institute of Queensland and the Queensland Law Society, makes that choice for the parties. Clause 6 is the clause about time, and it states that time is of the essence of the contract. The current version is the first edition of the Contract for the Sale and Purchase of Residential Real Estate, in use since 1 August 2025, which Proctor, the Law Society's journal, reported had replaced the separate contracts for houses and for units.
The phrase cuts both ways. It binds the seller who cannot hand over a clear title on the day as tightly as the buyer whose lender is not ready with the money. It also applies to more than settlement. The dates for paying the deposit, for giving notice about finance and for giving notice about building and pest reports are deadlines of the same kind.
Where the settlement date comes from
The settlement date is written in the reference schedule at the front of the contract. It is usually a number of days from the contract date or a calendar date, chosen by negotiation. A period of several weeks is usual for an established home, but nothing in the law fixes it.
The Property Law Act 2023 deals with one trap in the calendar. Under section 78, if the day of settlement falls on a day that is not a business day, and the parties have not expressly chosen a Saturday, Sunday or holiday, settlement moves to the next business day. The Act's definition of a business day leaves out Saturdays, Sundays and public holidays in the place where settlement is to occur. It also leaves out 27 to 31 December, so a date that lands between Christmas and New Year rolls forward into January.
Related readThe building and pest clause in a Queensland contract, step by stepThe last days of December are not business days
Under the Property Law Act 2023, 27 to 31 December do not count as business days for settlement, whatever day of the week they fall on. A contract counted in business days, or due to settle in that week, runs longer than the calendar suggests.
The time of day matters as well. Under the standard contract an extension notice has to be given before 4pm on the settlement date, according to the law firm summaries of clause 6.2, and the electronic settlement rule in clause 6.3 is built around the hour between 3pm and 4pm. Settlement afternoon is where most of the pressure collects.
What happens when one side is not ready
If the day arrives and one party cannot settle, and none of the extensions described below applies, that party is in default. The party who was ready then has a choice the general law has long recognised. They may affirm the contract, which keeps it alive, and insist on performance. Or they may terminate.
For a seller who terminates because the buyer did not settle, the usual consequences are that the deposit is kept, the property is resold, and any shortfall and costs may be claimed from the buyer. For a buyer who terminates because the seller could not settle, the deposit comes back, and a claim for losses may follow. A party who would prefer the sale to go ahead can ask a court to order it, a remedy called specific performance.
The size of the deposit at stake has a legal limit of its own. The Property Law Act 2023 treats a contract as an instalment contract, with extra protection for the buyer, if the buyer must pay more than the prescribed percentage before becoming entitled to the transfer. Section 87 sets that percentage at 10 per cent of the price for most sales and 20 per cent for a proposed lot bought off the plan. In practice this is why deposits on established homes do not exceed 10 per cent.
Related readWhen a buyer or seller defaults on a Queensland contract: the remediesTwo cautions belong here. The first is that termination has to be done properly. A party who purports to end a contract without the right to do so may find that they are the one in breach. The second is that the right can be lost by behaviour. A party who knows the other side is late and carries on as though the contract is still on foot may be taken to have chosen to keep it. Both points turn on the facts, which is why a missed settlement is a matter for a solicitor on the day and not something to resolve by text message.
The five business days either side can take
Until 2022 the standard contract had no give in it. A bank that was not ready with the loan funds at the appointed hour could put a blameless buyer in default. Proctor reported at the time that new editions of the residential contracts would be released on 20 January 2022 with a new clause 6.2, under which both the buyer and the seller could obtain a short extension of settlement if either was unable to settle because of the inaction or delay of a financier, or for any other reason.
The mechanics, as summarised by law firm Bradley Bray in its account of the 2022 changes, are simple. Either party may extend the settlement date by giving written notice to the other before 4pm on the day settlement is due. The new date may be up to five business days after the original one. The other side's consent is not needed, and no reason has to be proved.
Related readBuying or selling a Queensland home 'as is': what the contract still saysThree features keep the clause from dissolving the deadline. The extension has a ceiling: five business days from the date first agreed, and no further. Time stays of the essence for the new date, so the party who extended must be ready then. And the notice has its own deadline. A notice that arrives after 4pm on settlement day arrives after the default has already happened.
A worked example shows the reach of the clause. Suppose a contract is due to settle on a Thursday with no public holidays nearby. At 2pm that day the buyer's lender says the funds will not be available until Monday. The buyer's solicitor gives notice before 4pm extending settlement to Monday, which is two business days later. If Monday also fails, a further notice before 4pm on Monday could move the date again, but not past the following Thursday, which is the fifth business day after the original date. After that Thursday the clause is spent. The figures are illustrative only.
The automatic 24 hours in an electronic settlement
Titles Queensland describes electronic conveyancing as mandated for most transactions, so the typical settlement now takes place in an online workspace, where each side's representative and each bank signs off on the documents and the figures before funds move. Because every participant can edit the workspace, a late change by one of them can unsign it for everyone, minutes before the cut-off.
The first-edition contract added a rule for that situation. Proctor's notes on the advance copies released in July 2025 describe clause 6.3: where a workspace becomes unsigned between 3pm and 4pm on the settlement date because of a change made by another party, settlement is automatically extended by 24 hours. No notice is required. The extension happens once only in a transaction.
Related readCaveats in Queensland: protecting an interest in land before settlementThe clause is narrow on purpose. It does not help a party whose own side caused the problem, and it does not apply to trouble that arises before 3pm, when there is still time to give a notice under clause 6.2. It exists for the last-hour failure that leaves no time to do anything else.
When the computers are down
Two sections of the Property Law Act 2023 deal with technology failing on the day. They apply by force of the statute, whatever the contract says, and they treat two kinds of failure differently.
Section 79 covers the land registry. If the registry's computers are inoperative so that the buyer cannot check the title on the day, time stops being of the essence. The seller is treated as not having proved title, and neither party is in breach. Either party may then give a notice naming a new settlement day, which must be at least three and not more than seven business days after the notice is given. Once that notice is received, time is of the essence again.
Section 80 covers electronic conveyancing more broadly. If an electronic settlement cannot be completed because computers are inoperative at the land registry, the revenue office, the Reserve Bank, a financial institution involved in the transaction or the electronic lodgement network itself, neither party is in breach. Here time does not stop being of the essence. Instead, settlement moves automatically to the next business day, and both parties must do everything required to settle then.
The difference in design is deliberate. An outage in a payment system is expected to be fixed overnight, so the Act simply slides the appointment by one business day. A registry outage that prevents a title check is treated as open-ended, so the Act stops the clock and lets either side restart it with notice.
Related readThe deposit in a Queensland sale contract: amount, holder, forfeiture| Source | Trigger | How far | Time still of the essence? |
|---|---|---|---|
| Contract clause 6.2 | Either party's notice before 4pm | Up to 5 business days in total | Yes |
| Contract clause 6.3 | Workspace unsigned between 3pm and 4pm | 24 hours, once | Yes |
| Act, section 79 | Registry computers inoperative | 3 to 7 business days after notice | Suspended until notice |
| Act, section 80 | Settlement systems inoperative | Next business day | Yes |
| Act, section 81 | Adverse event | 5 to 10 business days after notice | Suspended until notice |
Property Law Act 2023 (Qld), sections 79 to 81; Proctor and Bradley Bray summaries of the REIQ and QLS standard contract.
Cyclones, floods and other adverse events
Queensland's weather has stopped settlements often enough for the law to plan for it. Section 81 of the Property Law Act 2023 applies when a party cannot settle because of an adverse event. The Act's examples include cyclones, floods, public health emergencies and acts of terrorism.
When the section applies, time stops being of the essence, and the party who could not attend is not in breach on that account. Relief comes with duties. The affected party must take reasonable steps to mitigate the effects of the event on their ability to settle. They must tell the other party. And once the event has ceased to prevent settlement, a notice must be given fixing a new settlement day at least five and not more than ten business days after the notice. From the receipt of that notice, time is of the essence again.
The section is about inability, not inconvenience. A flood that closes the solicitor's office or cuts the road to the bank is one thing. A removalist who cancels because of rain is another. The section does not suspend the contract for everyone in a declared area; it protects a party who is in fact prevented from performing. Whether that test is met in a given case is a question of evidence, so a party relying on it should keep a record of what the event stopped them doing and when that ended.
Extending by agreement
The routes above work without the other side's consent. The parties can also simply agree to a new date, and for anything longer than five business days that is the only way. A buyer whose finance needs two more weeks, or a seller whose next home is not ready, has to ask.
Related readEasements and encumbrances: what a Queensland contract leaves on titleAn agreed extension is a variation of the contract. Section 7 of the Property Law Act 2023 says a contract for the disposition of land is not enforceable unless it is in writing, or evidenced in writing, and signed by the party against whom it is to be enforced. A change to the settlement date is safest treated the same way: in writing, signed or confirmed by both sides' solicitors, stating the new date and stating that time remains of the essence.
That last statement is not decoration. An extension granted loosely, or a pattern of letting dates pass without comment, can leave it unclear whether any firm deadline still exists. If time is no longer of the essence, a party who wants to bring matters to a head cannot terminate on the spot. The general law requires them first to give the other side a notice fixing a reasonable period to complete, and only if that period passes may they end the contract.
- Time stopsA registry outage, an adverse event or a loose extension means the deadline no longer bites.
- A notice names a new dayUnder the Act the window is fixed. Under the general law the period must be reasonable.
- Time is of the essence againFrom receipt of the notice, the new day is a hard deadline for both parties.
The other deadlines in the contract
Settlement is the date people fear, but the earlier dates are where contracts more often come undone. The finance date and the building and pest inspection date each carry a cut-off time on the day, and each requires a notice. The extension in clause 6.2 is an extension of the settlement date only. It does not move a finance date or an inspection date. A buyer who needs more time for a loan approval or a report needs the seller's agreement, given clearly and before the deadline.
Related readWhat stays with the house: fixtures and chattels in a Queensland saleThe statutory cooling-off period is separate again. The Queensland Government's guidance says a residential contract may be subject to a cooling-off period of five business days, with a termination penalty of 0.25 per cent of the purchase price if the buyer withdraws. That period is set by legislation, not by clause 6, and the settlement extensions described in this guide have no effect on it.
Keeping a contract on time
A few habits follow from the way the rules are built, and they are the same for buyers and sellers. Every date in the reference schedule goes into a calendar on the day the contract is signed, with its cut-off time and the name of the person responsible for it. The count is made in business days where the contract counts in business days, with public holidays and the last week of December taken out.
Problems are raised early. A lender's delay that is known on Tuesday can be handled with a calm notice on Thursday morning; the same delay discovered at 3:45pm on Thursday leaves fifteen minutes. And changes are made in writing, through the solicitors or conveyancers, in words that say what the new date is and that time remains of the essence.
The extensions are short, specific and tied to notice. They give a transaction room to recover from a bad afternoon without turning the settlement date into an estimate.
None of the relief described here rewards a party who has simply not prepared. Each provision deals with a particular kind of obstacle and expects settlement to follow within days. The phrase at the centre of clause 6 still means what it says, and the safest reading of any contract is that every date in it will be enforced.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
