Are these sentence grammatically correct?
Is there a time that would work better for you?
Let me know if there is a time that would work better for you.
Should these sentence use will instead?
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Would is softer, you're offering up the possibility of a more convenient time, if the person would like that. You're suggesting the idea, really! It sounds more polite to many people.
Will is more direct, similar to is there a time that works better for you - in a way, you're asking "do we need to change this time?" and that might make some people feel uncomfortable, like they don't want to cause trouble.
So either of them works, it's just that would can be more polite.