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How Shall We Count The Days?

Written by on Monday, 03 May 2010 7:00 pm

"What a difference a day makes. ... 24 little hours." Unless you employ a different convention for counting days, in which case a day may seem to take somewhat longer than twenty-four hours.

How days are to be counted can be of considerable importance when it comes to contracts and agreements - oral or written - that contain provisions related to periods of time. Such provisions are common in real estate contracts.

Suppose you tell me at noon time Monday, "Pay me back within two days or face the consequences." Does that mean that my knees have only until noontime Wednesday? Or would I be OK until 5 PM Wednesday, the end of the business day? Or might I have until 11:59 PM on Wednesday? These things can make a big difference.

The newly-released Purchase Agreement produced by the California Association of Realtors® (CAR) contains some important changes in the treatment of time-sensitive provisions. Because the CAR contract is the standard throughout the state, it behooves California agents and brokers to become familiar with the changes. Moreover, agents from other states can benefit from considering these issues, because, wherever one does business, such matters can be important. Regardless of how they are resolved, they need to be resolved.

The first change we note is that notices requiring the other party to perform some act are now to be phrased in days rather than 24-hour periods. For example, "You have 2 days from receipt of this notice to remove your loan approval contingency", rather than, "You have 48 hours … ." Among other things, this change brings these time periods into conformity with other time-related provisions of the contract (e.g. "Seller has 7 days after acceptance to disclose to Buyer…")

From that change we move on to the matter of what shall count as a "day". Many contracts, for example, will stipulate that "days" means "business days." The California Purchase Agreement is somewhat more detailed, to say the least. " 'Days' means calendar days. However, after Acceptance the last Day for performance of any act required by the Agreement (including Close of Escrow) shall not include any Saturday, Sunday, or legal holiday and shall instead by the next Day." To put it another way, the contract wants performance to be required only on what are normally considered to be business days.

Then there is the matter of counting days. Again, the contract is clear, if not wholly intuitive." 'Days After' means the specified number of calendar days after the occurrence of the event specified, not counting the calendar date on which the specified event occurs, and ending at 11:59 PM on the final day." In particular, we don't begin counting until the next day.

Back to our earlier example: If I have to pay you back 2 days after you make your demand at noon Monday, then - if we are using the CAR definitions - I have until 11:59 PM on Wednesday to come up with the money.

But what if you make your two-day demand at noon on Thursday? We begin counting on Friday. The 2nd day is Saturday, but performance isn't required on a Saturday, or on Sunday. Assuming Monday is not a holiday, I must pay you back no later than 11:59 PM on Monday. That's 107 hours and 59 minutes after the two-day demand was made. Good for me and my knees, but maybe not what you had in mind.

The CAR method of defining and counting days isn't perfect - whatever that would mean - but it is clear. Maybe some other method is preferable. The point is: it is important for agents and principals to have some clear agreement on these matters.

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  About the author, Bob Hunt

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.