Opinion ID: 535587
Heading Depth: 3
Heading Rank: 2

Heading: Whether Time Was of the Essence

Text: 37 The district court also properly rejected the contention that Towers's failures to provide materials required by the Loan Commitment were excusable on the theory that time was not of the essence. Parenthetically, we doubt that it could rationally be assumed that time was not of the essence in an agreement requiring a commercial lender to place $1.4 million in an escrow account at a commercial bank, presumably at an interest rate below commercial banks' then-prime lending rate of 8 1/2%, thereby precluding the lending of those funds at its normally significantly higher rates (e.g., 10 1/2% on the Towers loan), and costing the lender hundreds of dollars a day in interest. 38 In any event, New York law requires that contract provisions specifying dates for performance be strictly enforced in a contract action at law. In such an action, the parties are presumed to have agreed that time is of the essence unless there is contract language to the contrary. See Sparks v. Stich, 135 A.D.2d 989, 991, 522 N.Y.S.2d 707, 709 (3d Dep't 1987) (mem.); Lusker v. Tannen, 90 A.D.2d 118, 124, 456 N.Y.S.2d 354, 357 (1st Dep't 1982). While the converse is true in an action in equity, see id. at 124, 456 N.Y.S.2d at 357 (in equity, date normally not deemed to be of the essence unless it affirmatively appears that the parties regarded it as a material consideration), and Towers asked for specific performance of the loan commitment agreement, this was not properly an action in equity, for equitable relief would not have been appropriate. Specific performance is rarely granted where the subject of the contract is not real property. The rule is that, as to contracts pertaining to personal property, a party should be confined to his action for damages, unless it appears that he is entitled to the thing contracted for in specie, which to him has some special value, or in cases where it is apparent that compensation in damages would not furnish a complete and adequate remedy. Id. Money damages are the norm in actions involving personal property because personal property is relatively fungible. 39 The loan commitment agreement required Cadillac merely to provide Towers with money, and money is the quintessential fungible. Thus, even if Cadillac had breached the agreement, Towers would be entitled only to money damages reflecting the difference between the interest rate it had agreed to with Cadillac and such higher interest rate as it was reasonably forced to pay another lender as a result of Cadillac's breach. We see no basis for treating this action as anything other than the usual action at law for contract damages. 40 Accordingly, the court properly enforced the deadlines provided in the parties' written agreements.