Business Days: How to Count Them

The term “business days” is frequently encountered in various contexts, such as order delivery times, contract cancellation periods, or payment deadlines. This article will clarify the legal definition and implications of “business days,” including its relevance to mutual investment laws.

While seemingly straightforward, the concept of “business days” is more nuanced than it initially appears. Understanding its precise meaning is crucial for effective commercial transactions, enabling better contract planning and preventing financial disputes. Consider, for example, ordering furniture expected within 14 days, only to discover a discrepancy in interpretation resulting in a one-month delivery. Or, miscalculating a two-week cancellation window, leading to unwanted purchases and financial loss. These are common scenarios frequently litigated in small claims courts.

Upon completion of this article, you will gain a comprehensive understanding of “business days.” We will examine the legal definition of “business days,” their calculation, the inclusion of weekends and holidays, election days, eve of holidays, and business operations on weekends. Rest assured, all questions will be answered in a clear and concise manner.

Legal Definition of a Business Day

Surprisingly, the Interpretation Law, a general law, lacks a single, uniform definition. “Business day” originated within the banking system, necessitated by the increasing volume of transactions requiring clarity on credit and debit processing times.

Over time, “business day” evolved into a socio-commercial convention encompassing various activities beyond banking transactions. Global commerce largely calculates commitment periods based on “business days,” commonly used to define operating times or deadlines for actions (payments or deliveries).

Calculating business days depends on the context. Courts, for instance, employ their own calculation methods. For the broader commercial sector, distinctions fall into four main categories: (1) Consumer Protection; (2) Transactions under Standard Contracts (e.g., online purchases); (3) Banking; and (4) Capital Markets, Insurance, and Savings.

1. Calculating Business Days – Consumer Protection (48-Hour Refund Law Including Sabbath)

Israeli consumer protection is governed by the Consumer Protection Law, specifically regulating transactions between businesses and consumers. A separate article details exceptions to the Consumer Protection Law. While the law uses “business days,” it doesn’t specify calculation methods. In such instances, the Interpretation Law provides guidance.

These are the three fundamental rules for counting days according to the Interpretation Law (see below for months and years):

1. A “day” is not calculated proportionally. According to Section 3 of the Interpretation Law, a “day” runs from midnight (00:00) to the following midnight. Businesses often mistakenly equate two business days with 48 hours.
2. Unless otherwise specified, the count includes Saturdays and holidays, except when the last day falls on one: According to Section 10(c) of the Interpretation Law, rest days, holidays, or sabbaticals are included unless the last day falls on such a day.

For example: The Consumer Protection Law mandates that certain contract cancellations occur within 14 business days. If the 14th day falls on a rest day (Saturday), it is not counted, and the deadline shifts to the following Sunday.

Note: The business’s operating hours on rest days are irrelevant. If the last day falls on a rest day, the cancellation deadline is the following day.

3. The transaction day is not included in the count: According to Section 10(a) of the Interpretation Law, if a deadline is set in days or weeks from a specific date, that date is excluded from the count.

For instance, to cancel an order made on Wednesday, the 14-business-day count begins on Thursday, regardless of whether Thursday is a rest day.

Calculating Periods in Months or Years under the Consumer Protection Law

A prime example is the four-month cancellation period granted to certain groups (disabled individuals, senior citizens, and new immigrants). The deadline is the same date four months after the transaction. (Section 10(b) of the Interpretation Law)

For example: A transaction on January 1st allows cancellation until May 1st.

If the transaction is on the 31st, and the fourth month lacks that date, the last day is the last day of that month. For example: A transaction on October 31st, 2022, has a four-month cancellation deadline on the last day of February (27th or 28th, depending on leap year).

2. Calculating Business Days – Contracts, Work Orders, Online Orders

If an order confirmation states delivery within seven business days, or an online store’s terms and conditions specify ten business days, or a contractor promises delivery within 30 days, how are these periods calculated? Are the rules the same as for consumer transactions?

Generally, yes, but with a crucial caveat favoring the consumer. While the previously mentioned day-counting rules apply, the principle of contract law that favors the weaker party in contract interpretation applies, particularly when the contract is drafted unilaterally by the stronger party. This principle dictates that ambiguous contracts must be interpreted against the party with superior drafting power, whether they are the sole drafter or not.

This protection is particularly applicable to standard-form contracts drafted by businesses and presented to consumers. If such a contract allows for multiple interpretations, the interpretation unfavorable to the business will prevail. (Section 25(b1) of the Contracts (General Part) Law, 5733-1973).

Example: An order confirmation promises delivery within seven days. The consumer understands this as calendar days, while the business claims it refers to business days. The consumer’s interpretation prevails due to the business’s superior position in drafting the order form.

3. Calculating Business Days – Banking System

Unlike consumer protection laws, the banking system provides a specific definition in the Banking (Customer Service) (Credit and Debit of Checks) Regulations, 5752-1992.

Section 1 defines a “banking business day” as “any day except for Saturday, holidays, Rosh Hashanah, the eve and day of Yom Kippur, the first and last days of Sukkot, Purim, the first and last days of Passover, Independence Day, Shavuot, and Tisha B’Av.”

The Banking Supervisor can declare a specific day a non-business day only in exceptional circumstances where proper service provision is hindered, or if a significant portion of bank customers face operational difficulties.

Unlike the Interpretation Law’s definition of “day,” Section 2(a) of the Banking Regulations defines banking business hours. A banking business day begins at the end of the preceding day’s banking business and ends at 6:30 PM or 2:00 PM on Fridays or eve of holidays (excluding the eve of Sabbath, eve of Purim, eve of Tisha B’Av, and the day before the eve of Yom Kippur).

The Banking Supervisor may specify earlier closing times for specific branches or deposit types, with prior branch notification.

Note that the Banking Regulations override some Interpretation Law provisions. Unlike consumer protection, the count begins on the same day as the relevant event, and calculations use specified business hours. The rule about excluding the last day if it falls on a holiday remains in effect.

4. Calculating Business Days – Capital Markets, Insurance, and Savings under the Ministry of Finance. What is the Mutual Investment Law?

Capital markets are governed by numerous regulations, mostly referencing the Mutual Investment Law. For example, Section 1 of the Income Tax (Rules for Approval and Management of Pension Funds) Regulations, 5724-1964, and Section 1 of the Supervision of Financial Services (Pension Funds) (Transfer of Funds Between Pension Funds) Regulations, 5768-2008, refer to the Mutual Investment Law.

These regulations govern, among other things, the timeframe for pension fund withdrawals and transfers between funds and investment tracks.

Definition of “Business Day” in the Mutual Investment Law

A business day is any day when most licensed banks under the Banking Law are open for business, excluding the eves of the following holidays: Rosh Hashanah, Yom Kippur, the first and last days of Sukkot, the first and last days of Passover, and Shavuot. These are considered rest days.

This definition does not supersede the Interpretation Law’s provisions regarding the meaning of “day,” the exclusion of the first day, and excluding the last day if it falls on a rest day.