No. A "time is of the essence" clause gives the innocent party the right to end the deal when a deadline is missed. It does not end the contract automatically, and a party who keeps performing after the missed deadline has made their choice to keep the deal alive.
The Ontario Superior Court applied that rule in Vandermolen Homes Inc. v. Mani, 2024 ONSC 2617, and the Court of Appeal upheld it in 2025 ONCA 45. Buyers who went silent on their builder for six months and walked two weeks before closing were ordered to pay $142,757.89.
Key takeaways
- A missed deadline under a time of the essence clause creates an option to terminate, not an automatic termination. The innocent party must elect to end the deal, promptly and in writing, and then act consistently with that choice.
- Conduct decides the question. Waiving conditions, paying a deposit, or discussing next steps after a missed deadline affirms the contract.
- Going silent does not cancel an agreement of purchase and sale. Only communication does.
- Refusing to close before closing day is anticipatory breach, and the deposits go first toward the seller's damages.
- Attacking a seller's resale efforts takes evidence. An appraisal or broker's opinion of value, not a theory.
This applies to buyers of new construction and resale homes, builders, real estate agents, and lawyers across Ontario.
What happened
On January 13, 2022, Rennichan Mani and Seeniya Joseph signed an agreement of purchase and sale with VanderMolen Homes Inc., a custom builder, for a single-family home at 26 Triebner Street in Exeter, Ontario. The price was $937,400, with a $5,000 deposit at signing and another $88,740 due once conditions were waived. Closing was set for August 31, 2022.
The agreement was conditional on solicitor approval and financing, to be confirmed by 6:00 pm on January 20. Instead of confirming on the deadline, the buyers offered to extend the condition deadline to January 26, an offer irrevocable until 11:59 pm on January 21.
The builder missed it, signing the acceptance on January 22. A day late.
Then something telling happened. Rather than walking away, the buyers waived their conditions on January 26. Their second deposit cheque cleared without protest.
Through the spring, the builder reached out about decor selections and countertops, by email and text. No response. The buyers later claimed they assumed the deal was off, but they never asked for their deposits back and never told the builder they were done.
On August 12, less than three weeks before closing, the builder spoke to Mr. Mani about the pre-delivery inspection. He gave no sign anything was wrong. Five days later the buyers cancelled the inspection, and their lawyer confirmed the same day that they would not be closing.
The builder listed the home at $849,000 on its realtor's advice. No offers. The price dropped to $799,900, then $749,900, then $724,900, and two conditional deals collapsed along the way. The home finally sold on October 11, 2023 for $705,000, more than a year after the buyers walked.
The builder sued for its damages. The buyers counterclaimed for the return of their $93,740 in deposits.
What the court decided
Justice ten Cate rejected the buyers' theory, and the Court of Appeal agreed.
The missed deadline did not void the deal. A time of the essence clause entitles the innocent party to treat the contract as at an end when a deadline is missed. It is a right that must be exercised. The buyers never exercised it. They did the opposite: they waived their conditions on January 26 and paid the second deposit. From that day the agreement was binding.
Conduct spoke louder than silence. On August 29, the buyers' lawyer confirmed in writing that his clients were unable to close and asked that the property be listed "so that the damages can be lessened." The court found that email telling: whoever wrote it knew the contract was valid and was asking the builder to mitigate a breach. The unanswered emails and disputed texts through the spring changed nothing, because silence is not termination.
The mitigation attack failed for lack of evidence. The buyers argued the builder's listing misdescribed the home and hurt the resale price. They brought no appraisal and no market comparisons. The burden of proving a failure to mitigate falls on the party who walked away, and a theory without numbers does not meet it. The same rule decided the chain-collapse case where a defaulting buyer paid $188,075.
The award. The resale loss was $232,400 (the $937,400 contract price less the $705,000 resale). Against that, the court credited the $93,740 in deposits and added $1,164.97 in property taxes and $2,932.92 in utilities the builder carried during the relisting. Total: $142,757.89. Worth noting: the builder had asked for $175,917.89, but the court refused its insurance and maintenance claims because they came without supporting documentation. Even the winning side only recovered what the paper proved.
Why this matters for Ontario real estate deals
"Time is of the essence" appears in nearly every Ontario agreement of purchase and sale, and it is one of the most misunderstood clauses in the form.
If the other side misses a deadline and you want out, act immediately. The right to terminate is real, but it evaporates the moment you keep performing. Waive a condition, cash a cheque, book an inspection, and you have affirmed the deal. The election needs to be made promptly, in writing, and followed consistently. A buyer who tried to impose new terms mid-deal instead of exercising his actual contractual options forfeited his deposit the same way.
If you think a deal is dead, confirm it. These buyers spent six months assuming the contract was over while their deposits sat with the builder. An agreement of purchase and sale ends by its terms, by mutual release, or by a proper election after breach. Never by one side quietly moving on.
New-build deals raise the stakes. Builder agreements run long, deadlines stack up, and the pre-delivery inspection is a formal step, so a buyer who skips it is telegraphing breach. New-construction closings across Windsor-Essex and Ontario carry their own set of deadlines, adjustments, and traps, which is why we review builder agreements as part of new build closings.
Acceptance timing matters on the way in, too. This dispute started with an irrevocable deadline missed by one day. Offer and acceptance mechanics decide real cases, as the sellers who added one schedule to a signed offer learned when it cost them $50,000.
Practical checklist
For buyers:
- If a deadline is missed and you want out, say so in writing immediately and stop performing. Do not waive conditions, pay deposits, or attend appointments afterward.
- If you no longer intend to close, tell the seller through your lawyer. Silence keeps the contract, and your exposure, alive.
- If you plan to challenge the seller's resale price, retain an appraiser or get a broker's opinion of value. Allegations without evidence fail.
For sellers and builders:
- When a buyer goes quiet, create a record: dated emails, texts, and calls about selections, inspections, and closing steps.
- On an anticipatory breach, relist promptly, follow professional pricing advice, and document every price change.
- Track carrying costs from breach to resale, with receipts. Property taxes and utilities were recovered here because they were documented. The builder's undocumented insurance and $30,860 maintenance claims were refused.
Common questions
What does "time is of the essence" mean in an Ontario real estate contract?
It means contractual deadlines are strict, and a party who misses one loses the right to insist on the deal, if the innocent party chooses to end it. It gives the innocent party a right to terminate. It does not terminate the agreement automatically.
Does a missed deadline automatically void an agreement of purchase and sale?
No. The innocent party must elect to treat the contract as ended and act on that election. In Vandermolen Homes Inc. v. Mani, the buyers could have walked when the builder accepted their extension a day late. Instead they waived their conditions and paid the second deposit, which affirmed the contract.
What is anticipatory breach in a real estate deal?
Refusing to perform before performance is due. When the buyers' lawyer confirmed on August 17, 2022 that they would not close on August 31, that was an anticipatory breach, and the builder was entitled to resell and claim damages.
Can buyers get their deposits back after refusing to close a new build in Ontario?
Not where the buyers are the breaching party and the seller has suffered a loss. Here the $93,740 in deposits was applied against the builder's $232,400 resale loss, and the buyers were ordered to pay a further $142,757.89 including carrying costs.
Does ignoring the builder's calls and emails cancel the contract?
No. Silence has no legal effect on a binding agreement of purchase and sale. The contract stays alive, deposits stay at risk, and damages keep accruing until the deal is properly terminated or performed.
Sources and decision link
Vandermolen Homes Inc. v. Mani, 2024 ONSC 2617, affirmed VanderMolen Homes Inc. v. Mani, 2025 ONCA 45. Read the decisions on CanLII: 2024 ONSC 2617 and 2025 ONCA 45.
The decisions apply Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051 on the meaning of time of the essence, and Coffey v. High, 2024 ONSC 420 and Nicolaou v. Sobhani, 2017 ONSC 7602 on the innocent party's election after a repudiation. The mitigation burden follows Spiridakis v. Li, 2020 ONSC 2173, aff'd 2021 ONCA 359.
Signing with a builder, or trying to get out of a deal after a missed deadline? Get a free quote. The election you make this week decides the case two years from now.
About the author: Christian Janisse is a licensed Ontario real estate lawyer and the founder of Simplyclose Law Professional Corporation. He acts for buyers, sellers, and lenders on purchases, sales, refinances, and title transfers across Ontario — in person in Windsor and remotely province-wide.