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
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
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.
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We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
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