Working out time periods in legal documents can be tricky. We have seen this highlighted very publicly in the case of Abu Qatada where there is currently some doubt as to whether the Home Secretary acted a day too soon to avoid a legitimate appeal being lodged. It may be some time before a ruling is given, but the consequence if Theresa May got it wrong by just one day is a potential delay of several months – not to mention the adverse publicity for the government.
It is just as important for businesses to be aware of the need to check time periods in business contracts and calculate carefully how they will apply. Even without the added complication of apparent discrepancies between English and French versions of the court’s decision which have been mentioned in the Abu Qatada case, care is needed when interpreting contractual and other time limits.
Many business agreements specify periods for certain actions such as the delivery of goods, the performance of a service, the payment of money, the delivery of a notice and so on. The consequences of not meeting those deadlines could be just as serious for your business and part of the answer is in ensuring that you have understood the time period correctly.
You might think that a requirement to deliver a notice by a specific date is pretty clear. But seemingly slight – or you might even think insignificant - variations in the wording of the obligation can make a difference as to the time by which you have to serve that notice. For example, if the notice has to be received before a specific date that date is arguably excluded and if you serve it on that date it could be validly rejected. If you have to give a number of clear days’ notice you need to bear in mind that the date you send the notice and the date it is received are not counted. If in addition it has to be served in a particular way, such as by first class post, you will have to add on any time specified as allowed for service by that method.
If you don’t serve a notice in time you could find that your business is locked into an agreement for another term or conversely that you have missed out on renewing a lucrative contract for another term. If the time period in question relates to delivery of goods or performance of a service you might not only have an unhappy customer, but there might be financial or other consequences such as the contract being suspended. If the contract also makes the time of fundamental importance any failure to meet the deadline could result in cancellation of the contract. A failure to pay in accordance with the contractual deadline might have similar consequences or could result in your business incurring interest charges.
The moral of the story is to make sure that you properly understand the time limits that apply to all your business contracts. If you are in any doubt– as the Home Secretary may have learnt the hard way – then take legal advice.
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Commercial Solicitor, Birmingham
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.