Loading...
 
 

IACCM Contract Management Forum

« view all forum posts

Bluehaus Group
2014-02-18 00:28:24

Definition of Days

If "day/s" is not specified in the Contract, does it automatically be considered as calendar days or working days?

The issue here has something to do with turn-around times for technical submittals and the Contractor is insisting that the 7 days mentioned in the Contract Agreement is calendar days while the Consultant is insisting it to be working days.
 
 •  Century 21 Vanguard  •   2014-02-20 20:21:46
One of my favorite authorities on legal usage in drafting contracts, Ken Adams, says:

'When drafting a provision referring to a period of time, you need to determine not only when the period begins or ends and how long it lasts, but also what unit of time it is stated in.

The smallest unit is the day, consisting of 24 hours from one midnight to the next. When denoting periods of time in days, I generally use business days rather than simply days. A business day is generally defined in contracts to mean any day other than a weekend or a public holiday in a given jurisdiction, or any day that banks generally are, or a named bank is, open for business. Using business days would ensure that the last day of a notice period is a business day. This would spare any party the awkwardness of learning, for example, that according to the notice provisions of its contract, the fax it sent on Sunday, the last day of the notice period, must be considered to have been received on Monday, too late to constitute the valid notification' (Adams, 2001, pp. 87-88).

Adams, K. A. (2001). Legal usage in drafting corporate agreements. Westport, CT: Quorum Books.
 
 
 •  Deutsche Bank  •   2014-02-25 09:26:02
Depending on the country / jurisdiction you are working in or where the contract should be applied to, it might be useful to be even more specific in the definition of 'days', two examples:

In Germany (and I assume also in other countries) there are the following possible 'days' (legal or business defined terms):

-- Days - usually calendar days
-- Workdays (german word 'Werktage') - Days, where (from a legal perspective) work is allowed without restrictions, i.e. in Germany Monday to Saturday (=everyday unless it is Sunday or a public holiday)
-- Working Days or Business Days ('Arbeitstage') - Days, where in specific industries the actual work takes place, i.e. in most cases Monday to Friday unless it is a public holiday
-- Weekday ('Wochentag') - Monday to Friday regardless of public holidays
-- Bankdays ('Bankarbeitstage') - Business Days with the exclusion of Christmas Eve and New Years Eve

If you have customers in Israel, working days may be Sunday to Thursday ...

The conclusion: Especially in international contracts it is useful, to have a precise definition of the '... Days' term you use.
 
 
 •   2014-02-28 11:41:21
I feel "day" if not defined in the contract shall be considered as calender day. Working day shall be considered only if it is explicitly mentioned in the contract, as the no. of working days changes depending on location, local festivals, national holidays, weekly off days etc.

Moreover, we have to check the other references in the contract like completion period, run test period etc which may be indicated in the no of days, where we can not expect from the contractor to consider the period in working days.
 
 
 •  Raytheon Canada Limited  •   2014-08-29 09:34:20
Would it be reasonable to assume that if the number of days is not a multiple of a month that you should include a specific denomer, i.e. business or calendar? However if the time frame is 30, 60, 90, or 120, one could assumes it's calendar days because it can be tracked by months versus counting actual days?
 
 
 •  Dept of VA  •   2014-11-18 08:39:27
As noted in the previous responses by my colleagues, this is a highly variable question depending on both your geographic region and operating sector. If in the US, the difference between a contract with a private entity or a government entity frequently dictates whether "calendar day" or "business day" applies. In your specific case, neither the Contractor nor the Consultant controls; guidance must be obtained from the dual questions, "What is written in the contract?" and "Under what jurisdiction is the contract written?"

Herr Neumann has already mentioned the significance and high value placed on specific word choice in German contracting. This kind of specificity requires an understanding of regional contract terms, as all countries in the EU have both shared contract law and individualities which apply based on historic practice, national individualities, etc. If you are operating in a country or region where sharia law applies (the Iranian oil bourse in Kish springs instantly to mind), the default definition of "days" may be very different than that applied in common law European contracting, the various North American court-centric contracting practices, or Asiatic contract practice.

Although you mentioned it is "not specified", if you are working in the US, there are peculiarities applicable to contract law which divide between public and private enterprise. One example is the "Christian Doctrine". It only applies to government contracts, but it boils down to "if the government forgot a clause which it normally uses, it's still constructively in the contract, and that's the risk one takes dealing with the government." Obviously, private industry would not condone that kind of practice, but this applies in the public sector.

Regardless of region, in your situation, it is usually the case that the tendency is to construe the meaning of "days" as whatever is most lenient to the party (or parties) who did not write the contract. So if your company wrote the contract, the language will be most strictly enforced against you. If the Contractor wrote it, you have a better argument that your intent was working days, and there was no "meeting of the minds" on the issue.

Either way, your situation appears to require both legal assistance (check with your legal department) and some mediation/negotiation. The contractor wants calendar days, so they are apparently comfortable following a more stringent timeline than the one desired by the consultant. Take into consideration the parties' reasons for arguing that their definition applies. The Contractor wants to get the job done quickly (is there a performance incentive involved for early/timely completion?), while the consultant may have their evaluative credibility at stake and therefore want more time to ensure complete reviews of the contractor's work.

Without further information, any further answer given here is guesswork or too vague to be of use, and probably won't help you much. Take this as a process improvement opportunity to ensure all your contract personnel are trained to include definitions of the word "day" in all documents from this point forward. In most places, the nature of contract language means writing "days" in a contract without further definition makes only one group of people happy: Contract dispute law firms, who bill by the hour world-wide.
 
 
 •   2014-11-19 17:12:28
If you already inked a deal with vague terms, either amend your contract for clarity, or default to the normal course of dealing with the other party if you have an established history with them.
 
 
 •  Kuwait National Petroleum Company  •   2016-11-17 11:48:16
If the "day" is not a defined term in the Contract, then the natural recourse should be to refer to the governing law of the Contract. Even that is not able to resolve the issue then a mutually agreed Contract Amendment is the most appropriate solution to avoid any further consequential disputes.
 
 
Replies: 7
 
Filter by category
 
Process
 
Operations & Capabilities
 
Organization & People
 
Strategy & Management Tools
Networks