The calculation of ‘Business Days’ under a contract will be determined by how that term is defined in the contract and how it is interpreted. A defined term is normally given its agreed effect, reducing the risk of an unintended interpretation. However, contract interpretation depends on the context, so the rest of the contract and the circumstances surrounding its formation may also affect the interpretation of a defined term.
The main principles of contract interpretation are:
Context, in the current climate of Covid, is key. These are unprecedented times in recent history, and this must be borne in mind when considering contractual provisions.
Market practice, particularly in transactional agreements, has, for some time, considered ‘business days’ by reference to banks being open for business, but commentators have questioned the usefulness of this, given the round the clock availability of online banking services. So, whilst the reference is still often used as a starting point, it is important to consider:
A party could try to argue that the terms of the contract are such that a term should be implied that business days should exclude days where there is a “lockdown” (or some other event that has a similar effect). A court could imply a term into a contract on the basis of:
Whether or not a term should be implied into a contract will therefore depend on the facts and circumstances of each case. Where obligations cannot properly be performed because of the ‘lockdown’, the obligated party has a strong argument such days should not count as business days and thus the deadlines within which to comply should be extended.
SMB remains fully operational and is here to deal with any and all commercial and transactional queries that you may have during this exceptional time. Please do not hesitate to get in touch – we are able to offer all of our services remotely and we have secure video conferencing facilities. Rest assured that we can deal with your legal issues seamlessly and confidentially, without you having to leave your home.
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