When is your “Business Day”? 


The definition section in commercial agreements usually includes “Business Day” as a defined term.

A typical definition for “Business Day” reads as follows:

“Business Day” means a day on which commercial banks are generally open for business in [insert state or country] for transaction of normal business (excluding Saturdays, [Sundays] and public holidays).

A clear and proper definition of “Business Day” is important because the parties are usually required to carry out their obligations under the agreements within certain time period. The time period may be calculated by reference to a fixed number of “Business Days”. A clear and proper definition of “Business Day” allows the parties to know the exact deadline for them to perform their obligations under the agreements.

It is also important to make sure that the state or country set out within the definition of “Business Day” is appropriate. The parties would not want the time to continue to run on a day when it is a public holiday in their place of business. This would be the case, for example, if a party has its place of business in Johor and observes Johor state holidays but the definition of “Business Day” above refers to Kuala Lumpur instead.

When setting out the definition of “Business Day”, the parties should consider their places of business which are relevant to the subject matter of the agreements (which may be in more than one state or country) and their registered offices (which may be in states different from their places of business).


This post was first posted on Linkedin on 5 July 2021.

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