Christmas is an appropriate time to write about how lawyers use “business day” to measure time in a contract. We don’t often encounter problems when we measure long periods in days: for example, “Buyer has 30 days from receiving the survey to notify Seller of Buyer’s objections to the survey.” If the buyer receives the survey on April 16, the buyer has until May 16 to notify Seller of Buyer’s objections. Everyone can count to 30 when you’re counting every day.
Many contracts measure short periods in business days, for example, “Buyer has 5 business days from receiving the title report to notify Seller of Buyer’s objections to the title report. The buyer wants to measure the period in business days because the buyer might receive the title report on the Friday before a three-day holiday weekend, perhaps on December 22, 2017, and doesn’t want Saturday, Sunday, and Christmas Day (today!) to count against the review time.
To leave nothing to chance, some careful drafters provide a definition of “business day.” I’ve seen a definition of a business day as a day that the courts in Multnomah County are regularly open for business. I’ve also seen definitions of “business days” as days on which banks are open for business, a definition that got mushy 40 years ago when Fred Meyer Savings & Loan began to open its offices on Sundays.
Most days don’t trip us up. No one in the United States would seriously argue that December 25 is a business day, nor Thanksgiving, nor July 4, nor New Year’s Day.
But Oregon has one day that’s a trap for the careless drafter: Columbus Day. Read more in the continuation about how Columbus Day bit the Oregon Department of Revenue in the pocketbook . . . .
Columbus Day is a national holiday, but it is not a state holiday. Federal courts are closed and the post office does not deliver regular mail, but state courts are open and parking meters are monitored. Even the Oregon Department of Revenue nodded off in 2011. It had until October 9 to file and serve a notice of appeal. It had to serve the notice of appeal on the taxpayer by certified mail. October 9 was a Sunday, and state law extended its deadline to file and serve to be Monday, October 10 – Columbus Day. The Department filed its notice of appeal with the state, because state offices were open, but it couldn’t serve the notice on the taxpayer on October 10, because the post offices were closed and couldn’t accept certified mail.
The taxpayer asked the tax court to dismiss the Department’s appeal on the ground that the Department had not served the notice of appeal on the taxpayer by October 10. The Department replied that it would have served the appeal on October 10, but that it did not expect the post office to be closed for the holiday, and that it should have extra time to serve its notice of appeal, as if the post office had been unexpectedly closed for a flood or hurricane.
The tax court held that Columbus Day is not a flood, disaster, emergency, or other catastrophic event. The judge included this pungent observation: “The department also argues that the closure in this case was unexpected to it. This position is not well taken. * * * In this regard, the record indicates that this postal holiday has been established for over 40 years and notice of the closure was publicly available. This closure was not unexpected.” (The case is Department of Revenue v. American Honda, TC 5038, issued December 21, 2011.) The court threw out the Department’s appeal.
Why take the chance on what is a business day and what isn’t? Unless you have a good reason to count in business days, measure short periods in calendar days.