When parties carry out their obligations under an agreement, they may be able to carry out the obligations only on a working day. This is usually achieved by providing in the agreement that the obligations would be done on a “Business Day”.

A typical definition of “Business Day” provides that it is a day on which commercial banks in [insert place where the parties carry out their business] are open for transaction of normal banking business and which is not a public holiday, [Saturday and Sunday].

The definition of Business Day should be tied to the place where the parties carry out their business. As some public holidays are observed by certain states only, a party which is carrying out business in Malacca may not be able to carry out its obligations when it is a working day in Kuala Lumpur but a public holiday in Malacca, for example. The same consideration applies if parties have their place of business in different countries.

It is a practical consideration but sometimes overlooked. Check the definition of “Business Day” in agreements to ensure it is feasible for the parties to the agreements.

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This post was first posted on Linkedin on 17 February 2021.