There are a number of instances in a commercial property setting where businesses can promote certainty and avoid pitfalls of using unclear language or common phrases. Some practical examples of how specifying precise timings in commercial property documentation may impact your business:
Notice provisions in a lease • Such provisions often follow section 196 of the Law of Property Act 1925 which stipulate the form of the notice and are used as standard across the industry. However, these provisions do not state a cut-off point on a given working day by which notices must be received in order to be deemed served.
• Including certain deadlines may be advisable, particularly for landlords who do not work past a certain time, due to their office closing at 5pm, for example.
Deadlines for receiving rent • Landlords typically specify the dates on which rent should be paid but the particular time by which the funds need to be transferred into the landlord’s account is often left unspecified. In the age of internet banking and near-instantaneous transfers, this can leave tenants with the luxury of paying rent at any point on a given day.
• This may not be an attractive position for a landlord, however, as it may need to transfer rent monies received between its accounts, but not have an employee available to do this past a certain time, such as 5pm or 6pm. The landlord could also be restricted by banking cut off times. In this instance, setting an earlier deadline for receiving rent (e.g. 12pm), would be advantageous to the landlord whilst providing clarity to each party.
Cross-jurisdictional working hours • Where a business has offices around the globe, time zones becomes an issue, with different offices closing at different times of the day (and at different times across the world).
• In such circumstances, it may be helpful to specify a deadline for contact with respect to a particular time zone or city (e.g. 8pm GMT / London time).
Conclusion The Lehman Brothers case serves as a cautionary tale for using common phrases in legally binding documents. Whilst there may be circumstances where flexibility - considered by some as ambiguity - is desirable, careful consideration should be given to the use of such phrases instead of inserting specific times and dates. Businesses and their advisers must be mindful as to whether the consequences that result from using common phrases are right for them or if precise wording and the certainty it brings is preferable.
When do you close for business?
Christopher Nelson, Trainee Solicitor e: christopher.ne
t: +44 (0)20 7395 3088
Richard Stebbing, Trainee Solicitor e: firstname.lastname@example.org
t: +44 (0)20 7395 3052
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