Timing disputes are among the most common and costly issues in Ontario real estate transactions. A frequent question is deceptively simple:
If a contract says something must be done “within X days,” how are those days counted?
This issue often arises in Agreements of Purchase and Sale (APS) involving conditions, waivers, requisitions, deposits, or closing adjustments. The answer matters because, in Ontario real estate law, time is almost always of the essence.
1. Court rules vs. contracts: an important distinction
A common misconception is that contractual deadlines are governed by the Rules of Civil Procedure. They are not.
- The Rules of Civil Procedure (including Rule 3 on computation of time) apply to court proceedings.
- Contracts, including agreements for the sale of land, are governed by principles of contract interpretation.
Ontario Courts often arrive at the same counting result but by a different legal route.
2. The governing principle: exclude the first day, include the last
Where an APS states that something must be done “within X days”, and the contract does not explain how to count those days, Ontario Courts apply a well‑established interpretive rule:
✔ The day of the triggering event is excluded
✔ The final day of the period is included
In practical terms:
- The day the event occurs (acceptance, delivery, notice, etc.) is not counted
- Counting begins the following day (Day 1)
- Day X is the deadline
3. Where does this rule come from?
(a) The Legislation Act, 2006 (Ontario)
Although it governs statutes, Ontario Courts routinely apply its time‑computation rule by analogy when interpreting contracts:
A reference to a number of days between two events excludes the day on which the first event occurs and includes the day on which the second event occurs.
This provides an objective, predictable method of counting something courts strongly favour in commercial agreements.
(b) Contract interpretation jurisprudence
Ontario courts interpret contracts:
- Objectively
- In a commercially reasonable way
- To promote certainty, especially in real estate transactions
Counting the triggering day would shorten the agreed time period and introduce uncertainty, results Courts generally avoid.
4. Why this matters especially in land transactions
Agreements for the sale of land are treated differently from many other contracts:
- Time is presumed to be of the essence, often expressly stated in the APS
- Failure to meet deadlines can result in:
- loss of conditions
- forfeiture of deposits
- termination rights
- litigation over breach
Because of these consequences, Courts apply strict but conventional methods of counting time.
5. A practical example
Clause:
“The Buyer shall deliver a waiver of the financing condition within five (5) days of acceptance.”
Acceptance: Monday
| Day | Count |
| Monday | Acceptance day – not counted |
| Tuesday | Day 1 |
| Wednesday | Day 2 |
| Thursday | Day 3 |
| Friday | Day 4 |
| Saturday | Day 5 – deadline |
If the fifth day falls on a Sunday or statutory holiday, the deadline typically moves to the next business day, unless the APS states otherwise.
6. “Time is of the essence”: the legal impact
Most Ontario APS forms state that time is of the essence. This means:
- Deadlines are strict
- Even a one‑day delay can be fatal
- Courts will not rewrite timelines to relieve a party from a missed deadline
This makes correct time calculation critical.
7. When the result may differ
The default rule can be displaced only if the contract says so, for example:
- “within five business days”
- “within five clear days”
- “counting the day of acceptance”
- “no extension for weekends or holidays”
Absent such language, Ontario courts apply the conventional rule: exclude the first day, include the last.
8. Conclusions
For Ontario Agreements of Purchase and Sale:
- “Within X days” excludes the triggering day
- Day X is included as the deadline
- The rule is grounded in statutory interpretation principles and commercial reasonableness
- Precision matters because time is of the essence in land transactions
Understanding this seemingly simple issue can prevent missed deadlines, lost deals, and unnecessary litigation.
Brian Madigan LL.B., Broker