News & Insights

When exactly is “close of business”?

Working late in the modern age. Bill Dixon, a partner in the Dispute Resolution & Litigation team considers a recent commercial court judgment on the legal meaning of “close of business”.

A recent commercial court decision (Lehman Brothers v ExxonMobil [2016] EWHC 2699) considered the meaning of “close of business” in a contract.

A particular notice under the contract had to be given to a specific fax machine by “close of business” on a particular date. ExxonMobil sent a fax which started going through at 5:54pm and arrived at 6:02pm. Lehman Brothers said the notice was late. Close of business was to be taken as 5pm. ExxonMobil argued that close of business should be taken as 7pm and that therefore the notice was validly served.

Mr Justice Blair decided that in the context of this particular contract and in the context of this particular industry, close of business was to be taken as 7pm.

The court decision should be seen as very context specific. This judgment is not laying down a general rule that close of business is to be regarded as 7pm. What the case does show, however, is that one should not automatically assume (especially in this era of increasingly long office hours) that close of business will never be later than 5pm or even 6pm. The safest course, of course, is not to leave this to chance and to insert a specific time into the contract rather than relying on general phrases.