Thursday, 16 March 2017

When is close of business?

Close of business
Ah – ‘close of business’. What a phrase. At least it’s not quite as bad as ‘close of play’.

These curious expressions which are frequently bandied about in offices throughout the western world are intended, of course, to mean the end of the working day. (Whatever the hell that is – particularly in today’s world of taking work home, answering work emails late into the evening and sleeping with a smartphone under your pillow. No wonder we’re all quivering wrecks.)

A recent case considered this very issue. No – not the quivering wrecks thing – but when ‘close of business’ occurs. The case, for those of you who might be interested, was Lehman Brothers International (Europe) (In Administration) v Exxonmobil Financial Services BV [2016] EWHC 2699 (Comm).

The claimant, Lehman Brothers, provided equities and bonds to the defendant, ExxonMobil, under a securities agreement. ExxonMobil sent a default valuation notice to Lehman Brothers, which, to be valid, needed to be received by 'close of business' by Lehman Brothers on the relevant day. The notice was sent by fax and was received by Lehman Brothers' London office at 6.02pm.

To determine whether the notice was valid under the agreement, the court had to consider when ‘close of business’ occurred. Lehman Brothers argued that 'close of business' in London was 5.00pm – meaning the notice had arrived too late and should be deemed to have been received the following day. ExxonMobil contended that 'close of business' was 7.00pm – meaning the notice was in time and therefore valid.

The court accepted ExxonMobil’s contention that, as the claimant, the onus was on Lehman Brothers to establish when the close of business had occurred for the purposes of the agreement. Crucially, Lehman Brothers adduced no admissible evidence on this point. Silly them.

The wording of the contract was such that the validity of the notice turned on the precise meaning of the term 'close of business for commercial banks in London’. From a contractual certainty standpoint, this still isn’t great, but at least it’s a bit narrower than ‘close of business’.

Lehman Brothers argued that this phrase meant 'normal business hours' as worked by ordinary businesses and high street banks. The court acknowledged that 'commercial bank' was not a term of art in English law, but accepted ExxonMobil's argument that, in the modern world, commercial banks closed at about 7.00 pm. The judge emphasised, however, that this was a finding of fact limited to the instant case. Consequently, it was held that, for the purposes of the agreement, ‘close of business’ meant 7.00pm. The valuation notice was therefore valid.

On use of the phrase ‘close of business’ generally, the judge said this:

[T]he term “close of business” on a particular day or date is a useful term which is used in many different contexts, including court orders. The present context is as to the time of receipt of notices in a standard form financial contract. Where the intent of such a contract is to impose a definite cut-off time in this regard, it can do so expressly [by stating a precise time.] The fact that the contract does not state a time, and uses the term “close of business” instead, gives a useful flexibility, and should deter arguments based on the precise time of receipt, which may make little commercial sense.

That’s an interesting point, but, as a school admissions officer might say, ‘you have to draw the line somewhere’. And when you’re dealing with contracts, it’s generally better if everyone knows where that line is going to be drawn.

From the perspective of contractual (and therefore commercial) certainty, there is simply no substitute for precision in the drafting of contracts. Close of business for one person might be very different to another person’s stance. The idea that use of a rather woolly phrase would help to deter quibbling over whether an action had or had not been taken in the required time makes me feel a bit uncomfortable. It didn’t exactly work in the present case, did it? But I take the court’s point as to it possibly helping in a day-to-day commercial pragmatism kind of thing. Maybe.

But here’s the acid test: if I saw that phrase in a contract I was reviewing, would I let it pass, or insist on it being substituted for a specific time?

The latter, you say? Yep – you’re damn right.

Sunday, 5 March 2017

All aboard the booger bus

bogey boy

Yep – it’s all a-happening down in Bristol.

From the Bristol Post 27/02/17:

A woman [called Sian, it seems] claims she was physically sick in the street after a passenger on a First Bus wiped a bogey on her leg.

Shocked and disgusted, she got off the bus and told First Bus she "puked in the middle of the street" in a complaint made on Twitter.

She said she wasn't sure if the incident was an accident or intentional but branded it "gross" in a series of outraged tweets.

"Some guy picked his nose next to me and left a boogie on my jeans," she wrote.

Responding to the complaint on social media, First Bus West of England said the incident should be reported to the police as an assault.

Sian said she would not be taking the matter any further as it was "just a boogie", instead asking for some complimentary bus tickets.

Her request, however, was rejected

Well – booger me. Poor Sian. Not even a complimentary ticket to ride the bus and have another opportunity for a passenger to, y’know, wipe snot all over her.  Sian – you’re a glutton for punishment.

Let’s face it: anything can happen on public transport. I was on a late-night train back from a client meeting in Leeds several years ago, when, towards the very end of the journey, I heard a curious loud rustling sound. It sounded much as though somebody was trying to scrunch up a sheet of baking parchment greaseproof paper. It happened a few times and I didn’t think anything of it until I suddenly became aware of everybody in front of me scrambling back in earnest.  This was followed, almost instantaneously, by a wave of very strong smell – something like spirit alcohol mixed with something I couldn’t quite place.

It quickly emerged that a young chap – he looked roughly in his mid-teens – had tried to consume his bodyweight in spirits and was now retching it up in the carriage. The rustling/scrunching sound was the contents of his stomach hitting the floor. Nice.

Suffice it to say, I, like my fellow passengers didn’t hang about, and was out of my seat in a flash and moving towards the back of the carriage like a scalded cat. The kid, thankfully, decided to get off at the next stop, but not before being admonished by the unimpressed train crew.

It’s a train journey that I won’t forget. A bit like this one.

I wonder if Michael Palin would be interested in reconstructing it for one of his ponderous railway shows…

Interestingly, this isn’t the first snot-related-possible-assault themed post that I’ve ever posted. Remember this?