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What does 4.6 The time for payment of all sums due to the

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What does "4.6: The time for payment of all sums due to the Company shall be of the essence of the contact."? This appears in a software development agreement with an Indian Software Development company doing business in CA. The preceding provision is "4.5: All invoices are payable immediately on issue". Thanks, Steve
Submitted: 7 years ago.
Category: Business Law
Expert:  J.Hazelbaker replied 7 years ago.
It means that the due date for payments is an essential term of the contract and failure to meet any payment deadline would be a material breach of the contract. The contract probably also has terms that define damages, including the possibility of liquidated damages, which would be owed upon a material breach.

That language is essentially a legal way of highlighting terms and saying "this is vital".

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