Key Point

  • Calculating the time for performance of legal obligations requires careful consideration of the language of the document imposing the obligation.

How many times have you struggled to calculate the due date of an obligation when dealing with ambiguous clauses such as "within five business days of" or "by a period no later than five business days after"? Do they mean the same thing? Do they include the first day? Or the last day? Or both? Or neither?

While statutory provisions and contractual clauses containing time limits for the performance of obligations may appear simple and are frequently treated as such, difficulty often arises when it comes to practically pinpointing the date for performance of your obligations. And the result can sometimes be disastrous.

For example, the Mineral Resources Act 1989 (Qld) uses both the expressions, "within five business days after" and "within five business days of". Although the Act itself provides no definitive guidance, applying the plain English meaning of these words would suggest that within five business days after would mean that the day on which the event occurred was excluded.

Therefore if the event occurred on 5 May (Mon), the five business days would be counted starting from 6 May (Tues) and performance would be due by 12 May (Mon).

On the other hand, within five business days of would suggest that the initial day should be counted. For example, if the event occurred on 5 May (Mon), you would count that first day, and performance would be due by 9 May (Fri).

Further guidance can be found in the Acts Interpretation Act 1954 (Qld) which says that if a time specification involves a specified number of days, the period is to be calculated excluding the beginning day and excluding the day on which the purpose is to be fulfilled. Under these rules, if an event is to occur five business days after an event that occurred on 5 May (Mon), the period would begin on 6 May (Tues) and performance would be due by 13 May (Tues). It is obvious that these small differences in interpretation can lead to huge differences in time which can have significant impacts on your legal rights and obligations.

There are two broad ways to avoid uncertainty about determining the due date for performance.

First, while you cannot exercise control over statutes, you can control the drafting of your contracts. When drafting contracts, it is advisable to ensure that clauses which have a time component are drafted so as not to be ambiguous. Specifying actual dates for the performance of obligations is ideal. If this is not possible, the timing of the performance of obligations needs to be clearly drafted. An interpretation clause about measuring time may also be useful. A few extra words inserted when drafting could be of great value in avoiding uncertainty later.

The second way to avoid uncertainty is to manage the timely performance of obligations operationally. In essence, this would involve interpreting the time for the performance of obligations as the shortest possible time and ensuring the obligations are performed within that time. While this method could avoid disputes about whether obligations are fulfilled in time, adopting this approach may unnecessarily limit the time you have available to make decisions.

Determining the time for performance can clearly have significant impacts on your business. Adhering to these timeframes can be crucial to discharging your legal obligations. Therefore, taking some time to get the time right in your drafting may save you time in the long run.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.