What’s a business day?

Key dates in a contract, especially payment dates, may be calculated by reference to a “business day”. For this reason, there must be a clear and concise definition of “business day” in a contract. If there is not, a dispute may arise, which could end up being stressful and costly.

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Spencer Wright

Spencer Wright is the litigation director at Gibbs Wright Litigation Lawyers. With a strong background in business and a commanding understanding of the law, Spencer offers strategic and creative solutions to a range of commercial litigation matters throughout Queensland.

Definition of “business day” in contracts

In many contracts, the term “business day” is not defined, meaning that the definition is provided by statute. However lawyers may draft their own definition into a contract, for example:

  • “business day” means Monday through to Friday, except for any Federal or State holidays;
  • “business day” means any day except Saturday or Sunday; or
  • “business day” means Monday through Friday from 8.30am to 5:00pm, other than Saturday, Sunday or a public holiday.

Care needs to be taken in drafting a definition to deal with situations such as when:

  • a contract operates across multiple jurisdictions, given that a public holiday may be specific to one State or Territory;
  • a business premises is closed and employees are working remotely, often during non-business hours; or
  • a party to the contract lives overseas, given the time difference.

Definition of “business day” in legislation

In some legislation a definition for “business day” is provided, for example:

in relation to an unsolicited consumer agreement, [it] means a day that is not:

(a) a Saturday or Sunday; or

(b) a public holiday in the place where the agreement was made.

The Australian Consumer Law (found in Schedule 2 of the Competition and Consumer Act 2010 (Cth))

[it] means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the place concerned.

The Corporations Act 2001 (Cth)

[it] means a day that is not —

(a) a Saturday or Sunday; or

(b) a public holiday, special holiday or bank holiday in the place in which any relevant act is to be or may be done.”.

The Acts Interpretation Act 1954 (Qld)

What qualifies as a business day?

Whether a day qualifies as a business day is subject to change. This was seen in the case of IOC Australia Pty Ltd v Mobil Oil Australia Ltd (1975), which assessed the effect of a declaration of a public holiday after the contract was formed. A payment was due on the last business day of the month, and when 31 December was declared a public holiday, the issue was whether the deadline had become 28 December. The High Court ruled that the definition of business day in the contract implied that a business day was a day when banks were open, therefore payment was due on December 28 rather than December 31 when banks were closed for the now-declared public holiday.

What happens if I miss a business day?

Missing a business day could lead to costly and extensive court action, damage to reputation and relationships, and even possible contract termination.

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